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EXHIBIT 10.1
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
VIASOURCE COMMUNICATIONS, INC.
(formerly known as THE RTK GROUP, INC.)
as Borrower,
THE LENDERS SET FORTH ON
THE SIGNATURE PAGES HERETO,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Agent.
dated as of August 3, 2001
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TABLE OF CONTENTS
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SECTION I. DEFINITIONS................................................................................2
1.1 Certain Defined Terms..........................................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement............28
1.3 Other Definitional Provisions and Rules of Construction.......................................29
SECTION II. THE LOANS.................................................................................29
2.1 Making of Loans; Notes........................................................................29
2.2 Interest on the Loans.........................................................................33
2.3 Letters of Credit.............................................................................37
2.4 Application of Payments, Repayments, Prepayments and Redemption of Loan; General
Provisions Regarding Payments.................................................................41
2.5 Unused Facility Fee...........................................................................45
2.6 Use of Proceeds...............................................................................45
2.7 Special Provisions Governing LIBOR Rate Loan..................................................45
2.8 Increased Costs, Taxes; Capital Adequacy......................................................48
2.9 Guaranties of and Security for the Obligations................................................50
2.10 Cash Management; Lock Boxes; Blocked Account Agreements.......................................51
2.11 Fees..........................................................................................53
SECTION III. CONDITIONS TO THE LOANS...................................................................54
3.1 Conditions to Effectiveness...................................................................54
3.2 Conditions Subsequent.........................................................................56
3.3 Conditions to Effectiveness of all Loans......................................................56
3.4 Conditions to Letters of Credit...............................................................57
SECTION IV. BORROWER'S REPRESENTATIONS AND WARRANTIES.................................................57
4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.................58
4.2 Authorization of Borrowing, etc...............................................................59
4.3 Financial Condition...........................................................................60
4.4 No Material Adverse Change; No Restricted Junior Payments.....................................60
4.5 Title to Properties; Liens; Real Property.....................................................60
4.6 Litigation; Adverse Facts.....................................................................61
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TABLE OF CONTENTS
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4.7 Payment of Taxes..............................................................................61
4.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts..................61
4.9 Governmental Regulation.......................................................................62
4.10 Securities Activities.........................................................................62
4.11 Employee Benefit Plans........................................................................62
4.12 Certain Fees..................................................................................63
4.13 Employee Matters..............................................................................63
4.14 Solvency......................................................................................63
4.15 Matters Relating to Collateral................................................................63
4.16 Disclosure....................................................................................64
4.17 Insurance.....................................................................................65
4.18 Intellectual Property.........................................................................65
4.19 Intentionally Omitted.........................................................................65
4.20 Environmental Protection......................................................................65
4.21 Intentionally Omitted.........................................................................67
SECTION V. BORROWER'S AFFIRMATIVE COVENANTS..........................................................67
5.1 Financial Statements and Other Reports........................................................67
5.2 Existence, etc................................................................................71
5.3 Payment of Taxes and Claims; Tax Consolidation................................................71
5.4 Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation
Proceeds......................................................................................72
5.5 Inspection Rights; Agent Meeting..............................................................73
5.6 Compliance with Laws, etc.....................................................................73
5.7 Environmental Disclosure and Inspection.......................................................74
5.8 Compliance with Related Documents.............................................................76
5.9 Additional Real Property Collateral...........................................................76
5.10 Dissolution of Inactive Subsidiaries..........................................................76
5.11 Chief Restructuring Officer...................................................................77
SECTION VI. BORROWER'S NEGATIVE COVENANTS.............................................................77
6.1 Indebtedness..................................................................................77
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TABLE OF CONTENTS
(continued)
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6.2 Liens and Related Matters.....................................................................78
6.3 Dividends; Seller Notes.......................................................................79
6.4 Investments; Joint Ventures...................................................................80
6.5 Contingent Obligations........................................................................80
6.6 Restricted Junior Payments....................................................................81
6.7 Financial Covenant............................................................................81
6.8 Restriction on Fundamental Changes; Asset Sales and Acquisitions..............................82
6.9 Sales and Lease-Backs.........................................................................83
6.10 Sale or Discount of Receivables...............................................................83
6.11 Transactions with Shareholders and Affiliates.................................................83
6.12 Disposal of Subsidiary Stock..................................................................83
6.13 Conduct of Business...........................................................................84
6.14 Amendments of Waivers of Related Documents and Charter Documents..............................84
6.15 Fiscal Year...................................................................................84
6.16 Payments on Account of Subordinated Indebtedness..............................................85
6.17 Material Contracts............................................................................85
SECTION VII. EVENTS OF DEFAULT.........................................................................85
7.1 Failure to Make Payments When Due.............................................................85
7.2 Default in Other Agreements...................................................................85
7.3 Breach of Certain Covenants...................................................................86
7.4 Breach of Warranty............................................................................86
7.5 Other Defaults Under Loan Documents...........................................................86
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc..........................................86
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc............................................87
7.8 Judgments and Attachments.....................................................................87
7.9 Dissolution...................................................................................87
7.10 Employee Benefit Plans........................................................................87
7.11 Change in Control.............................................................................88
7.12 Failure of Security or Guaranty...............................................................88
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(continued)
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7.13 Tenure of Chief Restructuring Officer.........................................................88
7.14 Payments on Subordinated Indebtedness.........................................................88
7.15 Payment of Restructuring and Consulting Fees..................................................88
7.16 Failure to Meet Payroll.......................................................................88
SECTION VIII. AGENT.....................................................................................89
8.1 Appointment...................................................................................89
8.2 Powers and Duties; General Immunity...........................................................90
8.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness...........91
8.4 Right to Indemnity............................................................................91
8.5 Successor Agent...............................................................................92
8.6 Security Documents and Guarantees.............................................................92
8.7 Appointment of Separate Agent.................................................................93
SECTION IX. MISCELLANEOUS.............................................................................93
9.1 Assignments and Participations in Loans.......................................................93
9.2 Expenses......................................................................................96
9.3 Indemnity.....................................................................................96
9.4 Set-Off; Security Interest in Deposit Accounts................................................97
9.5 Ratable Sharing...............................................................................98
9.6 Amendments and Waivers........................................................................98
9.7 Independence of Covenants....................................................................100
9.8 Notices......................................................................................100
9.9 Survival of Representations, Warranties and Agreements.......................................100
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative........................................101
9.11 Marshalling; Payments Set Aside..............................................................101
9.12 Severability.................................................................................101
9.13 Obligations Several; Independent Nature of Lenders' Rights...................................101
9.14 Headings.....................................................................................101
9.15 Applicable Law...............................................................................102
9.16 Successors and Assigns.......................................................................102
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(continued)
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9.17 Consent to Jurisdiction and Service of Process...............................................102
9.18 Waiver of Jury Trial.........................................................................103
9.19 Confidentiality..............................................................................103
9.20 Counterparts; Effectiveness..................................................................104
9.21 Restatement of First Amended Credit Agreement................................................104
9.22 Intent to Limit Interest Charges to Maximum Lawful Rate......................................105
9.23 Conflicts....................................................................................105
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EXHIBITS
A Form of Assignment Agreement
B Form of Borrowing Base Certificate
C Form of Compliance Certificate
D Form of Landlord Consent
E Form of Notice of Conversion/Continuation
F Form of Notice of Borrowing (Revolving Advance)
G Form of Financial Condition Certificate
X Form of Revolving Note
Y Form of Term A Note
Z Form of Term B Note
SCHEDULES
2.1 Commitments and notice addresses for Term B Lenders
2.10 Borrower's and Subsidiaries' Cash Management and Blocked Accounts
4.1(d) Subsidiaries
4.1(f) Collateral Matters
4.3 Financial Condition
4.4 No Material Adverse Change
4.5(b)(1) Real Property
4.5(b)(2) Real Property Leases
4.6 Litigation; Adverse Facts
4.8 Material Contracts
4.12 Broker's Fee
4.17 Insurance
4.20 Environmental Matters
6.2 Existing Liens (including list of existing UCC filings)
6.3 Existing Subsidiaries.
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "AGREEMENT"),
is dated as of August 3, 2001 and entered into by and among VIASOURCE
COMMUNICATIONS, INC. (formerly known as THE RTK GROUP, INC.), a New Jersey
corporation (together with its permitted successors and assigns, "BORROWER"),
THE LENDERS SIGNATORY HERETO (each individually referred to herein as a "LENDER"
and collectively as the "LENDERS"), and GENERAL ELECTRIC CAPITAL CORPORATION, a
New York corporation, in its individual capacity as lender pursuant to the
Original Credit Agreement and the First Amended Credit Agreement (both as
defined below, hereinafter "GECC"), and in its capacity as agent for the Lenders
hereunder, together with its successors and assigns ("AGENT").
RECITALS
WHEREAS, Borrower and GECC are parties to that certain Credit
Agreement dated as of September 7, 1999, as amended by that certain Amendment
No. 1 dated as of December 22, 1999 (as so amended, the "ORIGINAL CREDIT
AGREEMENT"), pursuant to which GECC provided a term loan to Borrower in the
initial principal amount of $15,000,000; and
WHEREAS, the Original Credit Agreement was amended and
restated by that certain Amended and Restated Credit Agreement dated as of March
10, 2000, as amended by that certain Amendment No. 2 to Amended and Restated
Credit Agreement dated as of May 31, 2000, that certain Amendment No. 3 to
Amended and Restated Credit Agreement dated as of July 24, 2000, that certain
Amendment No. 4 to Amended and Restated Credit Agreement dated as of August 15,
2000, that certain Amendment No. 5 to Amended and Restated Credit Agreement
dated as of April 13, 2001, that certain Amendment No. 6 to Amended and Restated
Credit Agreement dated as of May 21, 2001, and that certain Amendment No. 7 to
Amended and Restated Credit Agreement dated as of July 5, 2001 (as further
amended, modified, restated or supplemented from time to time prior to the date
hereof, the "FIRST AMENDED CREDIT AGREEMENT"), pursuant to which GECC extended
to Borrower, for the benefit of Borrower and its Subsidiaries, among other
things, a revolving loan in the amount of $27,000,000 in addition to the
$15,000,000 term loan outstanding under the Original Credit Agreement; and
WHEREAS, Borrower has requested that the credit facility
existing under the First Amended Credit Agreement be amended, modified and
restated pursuant to the terms and conditions set forth herein; and
WHEREAS, GECC, in its capacity as a lender under the Original
Credit Agreement and the First Amended Credit Agreement and in its capacity as
Agent hereunder, has agreed to amend, modify and restate the terms of the First
Amended Credit Agreement on the terms and conditions set forth herein, and each
of the Lenders has agreed to become a party hereto; and
WHEREAS, Borrower acknowledges and agrees that the Liens
granted pursuant to the Security Agreements (both as defined in the Original
Credit Agreement and the First Amended Credit Agreement) shall remain
outstanding and in full force and effect, without interruption or impairment of
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any kind, in accordance with their terms, as renewed, amended or restated
pursuant to the Security Agreements (as defined herein) and shall continue to
secure the Obligations (as defined herein); and
WHEREAS, Borrower and the other Loan Parties acknowledge and
agree that (a) the Obligations (as defined herein) represent, among other
things, the amendment, restatement, and modification of all Indebtedness under
the First Amended Credit Agreement; (b) the Loan Documents (as defined herein)
are intended to restate, renew, amend and modify the First Amended Credit
Agreement and the other Loan Documents (as defined in the First Amended Credit
Agreement) executed in connection therewith; and (c) this Agreement is not
intended to constitute, and shall not constitute, a novation and shall in no way
adversely affect or impair the priority of the Liens granted in connection with
the Original Credit Agreement, First Amended Credit Agreement and the other Loan
Documents (as defined in the Original Credit Agreement and the First Amended
Credit Agreement);
NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower, Lenders and Agent hereby agree that the First
Amended Credit Agreement is hereby AMENDED AND RESTATED as follows:
SECTION I.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACCOUNT DEBTOR" means any Person who may become obligated to any Loan
Party under, with respect to, or on account of, an Account, Chattel Paper (as
defined in the Security Agreements) or General Intangible (as defined in the
Security Agreements, including payment intangibles).
"ACCOUNTS" means all "accounts," as such term is defined in the UCC,
now owned or hereafter acquired by any Loan Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by "chattel paper" or "instruments" as
defined in the UCC, and including any such obligations that may be characterized
as an account or contract right under the UCC), (b) all of each Loan Party's
rights in, to and under all purchase orders or receipts for goods or services,
(c) all of each Loan Party's rights to any goods represented by any of the
foregoing (including unpaid sellers' rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed goods),
(d) all rights to payment due to any Loan Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, arising out
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of the use of a credit card or charge card, or for services rendered or to be
rendered by such Loan Party or in connection with any other transaction (whether
or not yet earned by performance on the part of such Loan Party), and (e) all
collateral security of any kind, given by any Account Debtor or any other Person
with respect to any of the foregoing.
"ACTIVATION EVENT" has the meaning assigned to such term in SECTION
2.10(C).
"ACTIVATION NOTICE" has the meaning assigned to such term in SECTION
2.10(C).
"ADJUSTED LIBOR RATE" means, for each Interest Period, a rate of
interest determined by Agent equal to (a) the offered rate for deposits in
United States Dollars for the applicable Interest Period which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on the second full Business
Day next preceding the first day of each Interest Period (unless such date is
not a Business Day, in which event the next succeeding Business Day will be
used); divided by (b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rate (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) Business Days prior to the
beginning of such Interest Period (including basic, supplemental, marginal and
emergency reserves under any regulation of the Board of Governors of the Federal
Reserve System or other governmental authority having jurisdiction with respect
thereto, as now and from time to time in effect) for Eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of such
Board) which are required to be maintained by a member bank of the Federal
Reserve System. If such interest rates shall cease to be available from Telerate
News Service, the Adjusted LIBOR Rate shall be determined from such financial
reporting service or other information as shall be mutually acceptable to Agent
and Borrower.
"AFFECTED LENDER" has the meaning assigned to that term in SECTION
2.7(C).
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting Securities or
by contract or otherwise.
"AGENT" means General Electric Capital Corporation, together with its
successors and permitted assigns, in its capacity as agent for the Lenders
pursuant to SECTION 8.1.
"AMENDMENT WARRANT" means that certain Warrant Certificate Representing
Warrants to Purchase Common Stock of Viasource Communications, Inc. dated as of
July 6, 2001 in favor of GECC, issued in connection with "Amendment No. 7 to
Amended and Restated Credit Agreement" dated as of July 5, 2001 by and among
Borrower, the Subsidiaries signatory thereto and GECC.
"APPLICABLE MARGIN" means, with respect to any Loan except for Term
Loan B, the percentage determined by reference to SECTION 2.2(A).
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"ASSET SALE" means the sale by Borrower or any of its Subsidiaries to
any Person other than Borrower or any of its Subsidiaries of (a) any of the
stock of any of the Subsidiaries, (b) substantially all of the assets of any
division or line of business of Borrower or any of its Subsidiaries, or (c) any
other assets (whether tangible or intangible) of Borrower or any of its
Subsidiaries outside of the ordinary course of business.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of EXHIBIT A annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (a) the Prime Rate or (b)
the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
"BASE RATE LOAN" means a Revolving Loan or Term Loan A, in each case,
bearing interest at rates determined by reference to the Base Rate as provided
in SECTION 2.2(A)(I).
"BLOCKED ACCOUNT" has the meaning assigned to such term in SECTION
2.10(A).
"BLOCKED ACCOUNT EFFECTIVE DATE" has the meaning assigned to such term
in SECTION 2.10(C).
"BORROWER" has the meaning assigned to such term in the preamble to
this Agreement.
"BORROWER PLEDGE AGREEMENT" means the pledge agreement executed and
delivered by Borrower in favor of GECC, pledging its capital stock and other
equity interests in Holdings and any other Subsidiaries now owned or hereafter
acquired by the Borrower, as reaffirmed in favor of Agent by the Reaffirmation
Agreement, as amended, restated, supplemented, or otherwise modified from time
to time.
"BORROWER SECURITY AGREEMENT" means the security agreement executed and
delivered by Borrower granting to GECC a first-priority security interest in all
Collateral owned by the Borrower, as reaffirmed in favor of Agent by the
Reaffirmation Agreement, as amended, restated, supplemented, or otherwise
modified from time to time.
"BORROWING AVAILABILITY" means as of any date of determination, the
lesser of (a) the Revolving Commitment, and (b) the Eligible Accounts Borrowing
Base, in each case, LESS the sum of the aggregate Revolving Loan outstanding and
the aggregate Letters of Credit then issued and outstanding.
"BORROWING BASE CERTIFICATE" means a certificate to be executed and
delivered by Borrower (on behalf of itself and the other Loan Parties) no less
than weekly on Friday of each week, and in any event, at any time a Revolving
Advance is requested by Borrower, or at the request of Agent, in substantially
the form attached hereto as EXHIBIT B.
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"BREAKAGE COSTS" means, to the extent that any Lender is funding the
maintenance of a Revolving Loan or Term Loan A during such funding period at the
Adjusted LIBOR Rate, during which the amount of such investment is reduced (in
whole or in part) prior to the end of the period for which it was originally
scheduled to remain outstanding (the amount of such reduced investment being
referred to as the "ALLOCATED AMOUNT"), the excess of (a) the discount or
interest that would have accrued on the Allocated Amount during the remainder of
such funding period if such reduction had not occurred over (b) the income, if
any, scheduled to be received by any Lender from investing the Allocated Amount
for the remainder of such funding period.
"BUSINESS DAY" means (a) for all purposes other than as covered by
clause (b) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and (b) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted LIBOR Rate
or a LIBOR Rate Loan, any day that is a Business Day described in clause (a)
above and that is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH COLLATERAL ACCOUNT" has the meaning assigned to that term in
SECTION 2.3(C).
"CASH EQUIVALENTS" means, as at any date of determination, (a)
marketable Securities (i) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (ii) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (b) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x
Investors Service, Inc. ("MOODY'S"); (c) commercial paper maturing no more than
one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (d) certificates of deposit or bankers' acceptances maturing within one
year after such date and issued or accepted by any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia that (i) is at least "adequately capitalized" (as defined
in the regulations of its primary Federal banking regulator) and (ii) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; and (e)
shares of any money market mutual fund that (i) has at least 95% of its assets
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invested continuously in the types of investments referred to in clauses (a) and
(b) above, (ii) has net assets of not less than $500,000,000, and (iii) has the
highest rating obtainable from either S&P or Moody's.
"CASH REVENUES" with respect to the Borrower and its Subsidiaries on a
consolidated basis, means the amount indicated on the monthly financial
statements, as required under SECTION 5.1(B), of the Borrower and Subsidiaries
as "revenues"; excluding from such figure the effect from the recognition of
deferred revenues thereon.
"CHANGE OF CONTROL" means any of the following:
(a) any person or group of persons (within the meaning of the
Exchange Act) owns or hereafter acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Exchange Act) of 30% or more of the then issued and outstanding shares
of capital Stock of Borrower having the right to vote for the election of
directors of Borrower under ordinary circumstances;
(b) during any period of twelve consecutive calendar months,
individuals who at the beginning of such period constituted the board of
directors of Borrower (together with any new directors whose election by the
board of directors of Borrower or whose nomination for election by the
stockholders of Borrower was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office;
(c) Crest ceasing for any reason to legally own and control at
least 13% (on a fully diluted basis) of the issued and outstanding shares of
capital stock of Borrower entitled to vote (without regard to any contingency)
for the election of members of the board of directors thereof, but at all times
determined exclusive of the effect of the issuance, whether or not exercised, of
any warrants or options held by GECC (including the GECC Warrants);
(d) the sale, lease, or transfer of all or substantially all
of Borrower's assets to any person or group (as such term is used in Rule
13d-5(b)(1) of the Exchange Act) other than a wholly-owned Subsidiary; or
(e) the adoption of a plan relating to the liquidation or
dissolution of Borrower.
"CHIEF RESTRUCTURING OFFICER" means Xxxxxxx X. Xxxxxxxxx of Cloyses
Partners, or any other third party mutually satisfactory to Agent and Borrower.
"CLOSING DATE" means the date of the making of the extensions of credit
hereunder or the date on which Agent notifies Borrower that each of the
conditions precedent set forth in SECTION 3.1 have either been satisfied or
waived.
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"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including capital stock), and all Intellectual Property, in each case,
in which Liens are purported to be granted pursuant to the Security Documents as
security for the Obligations.
"COMMITMENT" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "Commitment" on
SCHEDULE 2.1 or on the signature page of any Assignment Agreement pursuant to
which such Lender became a Lender hereunder in accordance with the provisions of
SECTION 9.1(B) as such Commitment may be adjusted from time to time in
accordance with the provisions hereof, which amount is the aggregate amount of
such Lender's Revolving Commitment, Term Loan A Commitment and Term Loan B
Commitment, and "COMMITMENTS" means, collectively, the aggregate amount of the
Commitment of all Lenders.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of EXHIBIT C annexed hereto delivered to Agent by Borrower pursuant to SECTION
5.1(E).
"CONCENTRATION ACCOUNT" has the meaning assigned to such term in
SECTION 2.10(A).
"CONCENTRATION ACCOUNT BANK" has the meaning assigned to such term in
SECTION 2.10(A).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Borrower and its Subsidiaries)
by Borrower and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Borrower and its
Subsidiaries.
"CONSOLIDATED EXCESS CASH FLOW" means, for any Fiscal Year, an amount
(if positive) equal to (a) consolidated net income, plus (b) solely to the
extent deducted in determining consolidated net income (i) consolidated
depreciation, amortization, plus (ii) Consolidated Interest Expense plus (or
minus, as the case may be) decreases (increases) in working capital, minus (c)
the sum, without duplication, of (i) scheduled repayments of Consolidated Total
Debt, (ii) Consolidated Capital Expenditures, (iii) Consolidated Interest
Expense, plus or minus (as the case may be), (d) solely to the extent deducted
in determining consolidated net income, extraordinary gains or losses which are
cash items, and plus (e) taxes deducted in determining consolidated net income
to the extent not paid for in cash.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest but excluding interest on the Seller Notes
and the Term B Notes, both to the extent not paid in cash) of Borrower and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Borrower and its Subsidiaries, including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Interest Rate Agreements.
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"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate amount of all Indebtedness that would be stated on the balance sheet
of Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (a) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (b)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (c)
under Interest Rate Agreements. Contingent Obligations shall include (i) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (ii)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (iii) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any security issued by that Person or of any material indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CREST" means Crest Communications Partners LP, together with its
successors, affiliates and assigns.
"CRI" means Communications Resources Incorporated (f/k/a CRI
Acquisition, Inc.), a Delaware corporation.
"CRI PLEDGE AGREEMENT" means the pledge agreement executed and
delivered by CRI in favor of GECC pledging its capital stock and other equity
interests in its Subsidiaries, as reaffirmed in favor of Agent by the
Reaffirmation Agreement, as amended, restated, supplemented, or otherwise
modified from time to time.
"DEFAULT" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default.
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"DEFAULT RATE" has the meaning assigned to such term in SECTION 2.2(E).
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DESIGNATED ACCOUNT" has the meaning assigned to such term in SECTION
2.1(A)(II).
"DISBURSEMENT ACCOUNT" has the meaning assigned to such term in SECTION
2.10(B).
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"DOMESTIC SUBSIDIARY" means each Subsidiary of Borrower incorporated or
organized in the United States of America or under the law of the United States
of America or of any state thereof.
"EBITDA" with respect to Borrower and its Subsidiaries on a
consolidated basis for any period, means an amount equal to (a) consolidated net
income of such Persons for such period, minus (b) the sum of (i) income tax
credits, (ii) interest income, (iii) gain from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets by
such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
Securities), (v) any other non-cash gains which have been added in determining
consolidated net income, in each case to the extent included in the calculation
of consolidated net income of such Person for such period in accordance with
GAAP, but without duplication, and (vi) the decrease in the deferred revenue
account during the measurement period, plus (c) the sum of (i) any provision for
income taxes, (ii) Consolidated Interest Expense, (iii) loss from extraordinary
items for such period, (iv) the amount of non-cash charges (including
depreciation and amortization) for such period, (v) amortized debt discount for
such period, (vi) the amount of any deduction to consolidated net income as the
result of any grant to any members of the management of such Person of any
stock, (vii) the increase in the deferred revenue account during the measurement
period, (viii) restructuring charges incurred by Borrower prior to June 30,
2001, and (ix) closing costs and legal expenses of Borrower incurred during the
month of July, 2001 in connection with this Agreement, in each case to the
extent included in the calculation of consolidated net income of such Person for
such period in accordance with GAAP, but without duplication. For purposes of
this definition, the following items shall be excluded in determining
consolidated net income of a Person: (1) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (2) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (3) any write-up of any assets; (4) any net
gain from the collection of the proceeds of life insurance policies; (5) any net
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gain arising from the acquisition of any Securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (6) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets, and (7) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary. For the purposes of
calculating the Total Leverage Ratio for any period, the income (or deficit) of
any other Person accrued prior to the date such Person became a Subsidiary of,
or was merged or consolidated into, such Person or any of such Person's
Subsidiaries shall be included in determining the consolidated net income of a
Person so long as the acquisition of such Person was permitted hereby or if such
acquisition occurred prior to the Closing Date, so long as the acquisition of
such Person was permitted by the First Amended Credit Agreement.
"ELIGIBLE ACCOUNTS" means all of the billed and unbilled Accounts owned
by each Loan Party, less Unapplied Payments, except any Account to which any of
the exclusionary criteria set forth below applies. Agent shall have the right to
establish or modify Reserves against Eligible Accounts from time to time in its
reasonable credit judgment. In addition, Agent reserves the right, at any time
and from time to time prior to the Termination Date, to adjust any of the
criteria set forth below, to establish new criteria and to adjust advance rates
with respect to Eligible Accounts in its reasonable credit judgment. Eligible
Accounts shall not include any Account of any Loan Party (a) that does not arise
from the sale of goods or the performance of services by such Loan Party in the
ordinary course of its business; (b) that is not a true and correct statement of
bona fide indebtedness incurred in the amount of the Account for merchandise
sold to or services rendered and accepted by the applicable Account Debtor; (c)
that is not owned by such Loan Party; (d) that arises from a sale to any
director, officer, other employee, Loan Party or Affiliate of any Loan Party, or
to any entity that has any common officer or director with any Loan Party; (e)
the Account is not paid within the sixty (60) days following its invoice date;
(f) as to which Agent's Lien thereon is not a first priority perfected Lien; (g)
that is payable in any currency other than Dollars; or (h) that is otherwise
unacceptable to Agent in its reasonable credit judgment.
"ELIGIBLE ACCOUNTS BORROWING BASE" means as of any date of
determination by Agent, from time to time, an amount equal to the sum at such
time of 85% of Eligible Accounts, and reflected on the Borrowing Base
Certificate delivered by Borrower, in each case less any Reserves established by
Agent at such time.
"ELIGIBLE ASSIGNEE" means (a)(i) a commercial bank organized under the
laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof; PROVIDED that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other Person that is an "accredited investor" (as defined
in "Rule 501(a)" promulgated under the Securities Act; "ACCREDITED INVESTOR");
and (b) any Lender or Affiliate of any Lender.
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"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
SECTION 3(3) of ERISA which is maintained or contributed to by Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates or with respect to
which Borrower or any of its Subsidiaries has liabilities.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (a) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (b) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity, or (c) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, rules, regulations, judgments, Governmental Authorizations, or any
other requirements of governmental authorities relating to (a) environmental
matters, including those relating to any Hazardous Materials Activity, (b) the
generation, use, storage, transportation or disposal of Hazardous Materials, or
(c) occupational safety and health, industrial hygiene or the protection of
human, plant or animal health, in any manner applicable to Borrower or any of
its Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 X.X.X.xx. 9601 et seq.), the
Hazardous Materials Transportation Act (49 X.X.X.xx. 1801 et seq.), the Resource
Conservation and Recovery Act (42 X.X.X.xx. 6901 et seq.), the Federal Water
Pollution Control Act (33 X.X.X.xx. 1251 et seq.), the Clean Air Act (42
X.X.X.xx. 7401 et seq.), the Toxic Substances Control Act (15 X.X.X.xx. 2601 et
seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 X.X.X.xx. 136
et seq.), the Occupational Safety and Health Act (29 X.X.X.xx. 651 et seq.), the
Oil Pollution Act (33 X.X.X.xx. 2701 et seq.) and the Emergency Planning and
Community Right-to-Know Act (42 X.X.X.xx. 1100l et seq.), each as amended or
supplemented, any analogous present or future state or local statutes or laws,
and any regulations promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute thereto.
"ERISA AFFILIATE" means, as applied to any Person, (a) any corporation
which is a member of a controlled group of corporations within the meaning of
SECTION 414(B) of the Internal Revenue Code of which that Person is a member;
(b) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of SECTION
414(C) of the Internal Revenue Code of which that Person is a member; and (c)
any member of an affiliated service group within the meaning of SECTION 414(M)
OR (O) of the Internal Revenue Code of which that Person, is a member. Any
former ERISA Affiliate of Borrower or any of its Subsidiaries shall Continue to
be considered an ERISA Affiliate of Borrower or such Subsidiary within the
meaning of this definition with respect to the period such entity was an ERISA
Affiliate of Borrower or such Subsidiary and with respect to liabilities arising
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after such period for which Borrower or such Subsidiary could be liable under
the Internal Revenue Code or ERISA as a result of such affiliation with such
former ERISA Affiliate.
"ERISA EVENT" means (a) a "reportable event" within the meaning of
SECTION 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (b) the failure to meet the minimum funding
standard of SECTION 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with SECTION 412(D) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under SECTION 412(M) of the Internal Revenue Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan;
(c) the provision by the administrator of any Pension Plan pursuant to SECTION
4041(A)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in SECTION 4041(C) of ERISA; (d) the withdrawal by
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to SECTION 4063 or 4064
of ERISA; (e) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which is reasonably
likely to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (f) the imposition of
liability on Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to SECTION 4062(E) or 4069 of ERISA or by reason of the
application of SECTION 4212(C) of ERISA; (g) the withdrawal of Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of SECTIONS 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is a reasonable likelihood for the assessment of
liability in connection therewith, or the receipt by Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
SECTION 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under SECTION 4041A or 4042 of ERISA; (h) the occurrence of an act or omission
which could give rise to the imposition on Borrower or any of its Subsidiaries
of fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under SECTION 409, SECTION 502(C), (I) or (L), or SECTION 4071
of ERISA in respect of any Employee Benefit Plan; (i) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan maintained by Borrower or any of its Subsidiaries or against
Borrower or any of its Subsidiaries in connection with any Employee Benefit
Plan; (j) receipt from the Internal Revenue Service of notice of the failure of
any Pension Plan (or any other Employee Benefit Plan Intended to be qualified
under SECTION 401(A) of the Internal Revenue Code other than a Multiemployer
Plan) to qualify under SECTION 401(A) of the Internal Revenue Code, or the
failure of any trust forming part of any Pension Plan to qualify for exemption
from taxation under SECTION 501(A) of the Internal Revenue Code; or (k) the
imposition of a Lien pursuant to SECTION 401(A)(29) or 412(N) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the events set forth in SECTION 7.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute thereto.
"FACILITY" or "FACILITIES" means any and all real property (including
all buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Borrower or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a floating rate
equal to the weighted average of the rates on overnight Federal funds
transactions among members of the Federal Reserve System, as determined by
Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in SECTION 5.1.
"FIRST AMENDED CREDIT AGREEMENT" has the meaning assigned to such term
in the recitals to this Agreement.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the 52/53 week fiscal period of Borrower and its
Subsidiaries ending on the Saturday immediately preceding December 31 of each
calendar year.
"FIXED CHARGE COVERAGE RATIO" means, as of any date of determination,
the ratio of (a) the sum of (i) (X) EBITDA as of the Fiscal Quarter then ended,
multiplied by (Y) four, minus (ii) Consolidated Capital Expenditures, minus
(iii) income Taxes excluded in determining EBITDA, in each case, for the twelve
(12) consecutive month period most recently ended, to (b) the sum of (i)
mandatory principal payments on Consolidated Total Debt, plus (ii) Consolidated
Interest Expense, in each case, for the twelve (12) consecutive month period
most recently ended.
"FORBEARANCE WARRANT" means that certain Warrant Certificate
Representing Warrants to Purchase Common Stock of Viasource Communications, Inc.
dated as of June 29, 2001 in favor of GECC, issued in connection with the
Forbearance Agreement dated as of June 29, 2001 by and among Borrower, the
Subsidiaries signatory thereto and GECC.
"FOREIGN SUBSIDIARY" means each Subsidiary of Borrower other than a
Domestic Subsidiary.
"FUNDING AND PAYMENT OFFICE" means (a) the office of Agent located at
0000 Xxxxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxx 00000-0000, Attn: Account
Manager - Viasource, and for wire transfer purposes, Bankers Trust Company, New
York, NY, ABA Routing No. 000000000, Credit Account No. 000-000-00, Account
Name: GECC/CAF Depository - Viasource, or (b) such other office of Agent as may
from time to time be hereafter designated as such in a written notice delivered
by Agent to Borrower and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
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"FUNDING THRESHOLD" has the meaning assigned to that term in SECTION
2.11(B).
"GAAP" means, subject to the limitations on the application thereof set
forth in SECTION 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination.
"GECC" has the meaning assigned to such term in the preamble to this
Agreement.
"GECC WARRANTS" means, collectively, the Amendment Warrant and the
Forbearance Warrant.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"GUARANTEED OBLIGATIONS" has the meaning ascribed to that term in the
respective Security Documents.
"HAZARDOUS MATERIALS" means (a) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", "acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (b) any oil, petroleum, petroleum fraction or
petroleum derived substance; (c) any drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude oil,
natural gas or geothermal resources; (d) any flammable substances or explosives;
(e) any radioactive materials; (f) any asbestos-containing materials; (g) urea
formaldehyde foam insulation; (h) electrical equipment which contains any oil or
dielectric fluid containing polychlorinated biphenyls; (i) pesticides; and (j)
any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority pursuant to applicable
Environmental Laws.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials which
is regulated pursuant to applicable Environmental Laws, including the use,
manufacture, possession, storage, holding, presence, existence, location,
Release, threatened Release, discharge, placement, generation, transportation,
processing, construction, treatment, abatement, removal, remediation, disposal,
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disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.
"HOLDINGS" means Viasource Holdings, Inc., a Delaware corporation.
"HOLDINGS PLEDGE AGREEMENT" means the pledge agreement executed and
delivered by Holdings in favor of GECC pledging its capital stock and other
equity interests in all now owned or hereafter acquired Subsidiaries (except for
Inactive Subsidiaries as may be specifically agreed to in writing by Agent), as
reaffirmed in favor of the Agent by the Reaffirmation Agreement, as amended,
restated, supplemented, or otherwise modified from time to time.
"INACTIVE SUBSIDIARY" means the Subsidiaries identified on SCHEDULE
4.1(D) hereto as inactive.
"INDEBTEDNESS", as applied to any Person, means (a) all indebtedness
for borrowed money, (b) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(d) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (i) due more than six months from the date of incurrence
of the obligation in respect thereof or (ii) evidenced by a note or similar
written instrument, and (e) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements constitute
Contingent Obligations, not Indebtedness.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that term in
SECTION 8.3.
"INDEMNITEE" has the meaning assigned to that term in SECTION 8.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in and necessary for the
conduct of the business of Borrower and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Borrower and its Subsidiaries, taken as a whole.
"INTEREST PERIOD" has the meaning assigned to that term in SECTION
2.2(B).
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Borrower or any of its Subsidiaries is a
party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
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"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, including any replacement or successor statute and
the Treasury regulations promulgated under the Internal Revenue Code.
"INVESTMENT" means (a) any direct or indirect purchase or other
acquisition by any Loan Party of, or of a beneficial interest in, any Securities
of any other Person (other than a Person that prior to such purchase or
acquisition was a wholly-owned Subsidiary of such Loan Party), (b) any direct or
indirect redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of Borrower from any Person other than any Loan Party, of any equity
Securities of such Loan Party, or (c) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by Borrower or any of its Subsidiaries to any other Person
(other than a wholly-owned Subsidiary of Borrower), including all indebtedness
and accounts receivable from that other Person that are not current assets or
did not arise from sales to that other Person in the ordinary course of
business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto minus, all cash returns of
principal on such investment, without any adjustments for increases or decreases
in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"INVESTOR GROUP" means Crest, Xxxxxxx National Life Insurance Company,
Old Hickory Fund I, LLC, BancBoston Investments Inc., PNC Capital Corp., Wood
Street Partners, II and GECC, together with any other Accredited Investor who
makes a subordinated capital investment in Borrower on terms and conditions
satisfactory to Agent.
"ISSUANCE" means the issuance by any Loan Party of Indebtedness for
borrowed money (other than the Obligations) or any equity security, PROVIDED
HOWEVER, that the conversion of the Term B Notes or the exercise of the GECC
Warrants shall not be deemed to be an Issuance.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"LANDLORD CONSENT" means, with respect to any Material Leasehold
Property, a letter from the owner of such property to Agent, pursuant to which
such owner agrees, for the benefit of the Lender Group, (a) that without any
further consent of such owner or any further action on the part of the Loan
Party holding such Material Leasehold Property, such Material Leasehold Property
may be encumbered pursuant to a Mortgage and may be assigned to the purchaser at
a foreclosure sale or in a transfer in lieu of such a sale (and to a subsequent
third party assignee if Agent, or an Affiliate of Agent so acquires such
Material Leasehold Property), (b) that such owner shall not terminate such lease
as a result of a default by such Loan Party thereunder without first giving
Agent notice of such default and at least 60 days (or, if such default cannot
reasonably be cured by Agent within such period, such longer period as may
reasonably be required) to cure such default and (c) to such other matters
relating to such Material Leasehold Property as Agent may reasonably request,
and the same shall be in form and substance substantially similar to EXHIBIT D
and satisfactory to Agent.
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"L/C ISSUER" has the meaning assigned to that term in SECTION 2.3(A).
"L/C SUBLIMIT" has the meaning assigned to that term in SECTION 2.3(A).
"LENDERS" means the persons identified as "Lenders" and listed on the
signature pages of this Agreement, together with their successors and permitted
assigns pursuant to SECTION 9.1, and Lender means any one of the foregoing
Lenders.
"LENDER GROUP" means, collectively, the Agent, the Lenders and the L/C
Issuer.
"LETTER OF CREDIT" means a commercial or standby letter of credit
issued for the account of Borrower by any L/C Issuer, or a banker's acceptance
issued by Borrower, for which any L/C Issuer has incurred Letter of Credit
Obligations, and "LETTERS OF CREDIT" means all such Letters of Credit.
"LETTER OF CREDIT FEE" has the meaning assigned to that term in SECTION
2.3(D).
"LETTER OF CREDIT OBLIGATIONS" means all outstanding obligations
incurred by any Lender to L/C Issuer at the request of Borrower, whether direct
or indirect, contingent or otherwise, due or not due, in connection with the
issuance of a reimbursement agreement or guaranty by any Lender to any L/C
Issuer with respect to any Letter of Credit. The amount of such Letter of Credit
Obligations shall equal the maximum amount which may be payable by a Lender to
L/C Issuers thereupon or pursuant thereto.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
maximum aggregate amount of the Letter of Credit Obligations.
"LIBOR RATE LOAN" means a Revolving Loan or Term Loan A, bearing
interest at rates determined by reference to the Adjusted LIBOR Rate as provided
in SECTION 2.2(A).
"LIEN" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"LOAN" means the Revolving Loan, Term Loan A and Term Loan B, and
"LOANS" means, collectively, the Revolving Loan, Term Loan A and Term Loan B.
"LOAN DOCUMENTS" means this Agreement, the Revolving Note, the Term
Notes, the Security Documents, the Reaffirmation Agreement, the Mortgages, the
Term B Note Purchase Agreement, each Letter of Credit, each reimbursement
agreement or guaranty by GECC with respect to any Letter of Credit, together
with and all other agreements, instruments, documents, certificates, pledges,
powers of attorney, consents, assignments, contracts, notices, and all other
written matter whether heretofore, now or hereafter executed and delivered to,
or in favor of, the Agent by or on behalf of any Loan Party in connection with
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this Agreement or the transactions contemplated hereby; PROVIDED that for
purposes of this Agreement, Loan Documents shall also include any Interest Rate
Agreements entered into by any Loan Party with any Lender or an Affiliate
thereof. Any reference in the Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, and shall
refer to this Agreement or such Loan Document as the same may be in effect at
any and all times such reference becomes operative.
"LOAN PARTY" means Borrower and its current and future Subsidiaries
but excluding Inactive Subsidiaries, from time to time executing a Loan
Document, and "LOAN PARTIES" means all such Persons, collectively.
"LOCK BOXES" has the meaning assigned to such term in SECTION 2.10(A).
"MANAGEMENT FEES" means any fee or other form of compensation to any
member of the Investor Group (or any Affiliate of any member of the Investor
Group) in compensation for services rendered or goods provided to Borrower or
any Subsidiary thereof.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse effect upon the
business, operations, properties, assets, liabilities, condition (financial or
otherwise) or prospects of Borrower and its Subsidiaries (taken as a whole) or
(b) the impairment of the ability of any Loan Party to perform, or of Agent or,
to the extent permitted by SECTIONS 9.4 and 9.13, any member of the Lender Group
to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Borrower or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could have a
Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means any leasehold interest of any Loan
Party as lessee under any lease of real property set forth on SCHEDULE 4.5(B)(2)
annexed hereto, and any other leasehold interest designated from time to time by
Agent in its reasonable discretion as being required to be included in the
Collateral that is designated by Agent as a "Material Leasehold Property" from
time to time.
"MORTGAGE" means a security instrument (whether designated as a deed of
trust or a mortgage or by any similar title) executed and delivered by any Loan
Party as such instrument may be amended, supplemented or otherwise modified from
time to time as permitted thereunder and hereunder.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in SECTION 3(37) of ERISA.
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"NET CASH PROCEEDS" means, with respect to any Asset Sale or Issuance,
the cash proceeds received by the Loan Parties in connection with such
transaction or transaction, minus the reasonable costs and expenses incurred in
connection therewith.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Borrower or any of its Subsidiaries (a) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (b) as a result of the taking of any assets of Borrower or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Borrower or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Borrower or such Subsidiary in respect thereof.
"NOTE" means the Revolving Note, Term A Note or Term B Note, and
"NOTES" means, collectively, the Revolving Note, Term A Note and Term B Note.
"NOTICE OF BORROWING" means, with respect to the Revolving Loan, a
notice substantially in the form of EXHIBIT F annexed hereto delivered by
Borrower to Agent pursuant to SECTION 2.1(D) with respect to a proposed
Revolving Advance.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of EXHIBIT E annexed hereto delivered by Borrower to Agent pursuant to
SECTION 2.2(D) with respect to a proposed conversion or continuation of the
applicable basis for determining the interest rate with respect to the Revolving
Loan or Term Loan A and specified therein.
"OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to Agent or any member of the Lender Group under the Loan
Documents (including, without limitation, the Revolving/Term A Obligations and
the Term B Obligations), whether for principal, interest, fees, expenses,
reimbursement (with respect to Letters of Credit or otherwise) indemnification
or otherwise, including obligations owed to any member of the Lender Group or
any Affiliate thereof, pursuant to an Interest Rate Agreement.
"OFFICER'S CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its president or chief
financial officer; provided, that every Officer's Certificate with respect to
the compliance with a condition precedent to the making of the Loans hereunder
shall include (a) a statement that the officer or officers making or giving such
Officer's Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (b) a statement that,
in the opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with, and
(c) a statement as to whether, in the opinion of the signers, such condition has
been complied with.
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"OPERATING LEASE" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.
"ORIGINAL CREDIT AGREEMENT" has the meaning assigned to such term in
the recitals to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to SECTION 412 of the Internal Revenue Code
or SECTION 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed pursuant to SECTION 401(A)(29) or 412(N) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Security Documents):
(a) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by SECTION 5.3;
(b) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in each case
incurred in the ordinary course of business (i) for amounts not yet overdue or
(ii) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of five (5) days) are being contested in good
faith by appropriate proceedings, so long as (A) such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made for any such contested amounts, and (B) in the case of a Lien with respect
to any portion of the Collateral, such contest proceedings conclusively operate
to stay the sale of any portion of the Collateral on account of such Lien;
(c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money), so long as no foreclosure, sale or similar proceedings have been
commenced with respect to any portion of the Collateral on account thereof;
(d) any attachment or judgment Lien not constituting an Event
of Default under SECTION 7.8;
(e) leases or subleases granted to third parties in accordance
with any applicable terms of the Security Documents and not interfering in any
material respect with the ordinary conduct of the business of Borrower or any of
its Subsidiaries or resulting in a material diminution in the value of any
Collateral as security for the Obligations;
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(f) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not and
will not interfere in any material respect with the ordinary conduct of the
business of Borrower or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the Obligations;
(g) Liens arising from the filing of UCC financing statements
for informational purposes in connection with operating leases or Capital Leases
permitted pursuant to SECTION 6.1(III), entered into by any Loan Party;
(h) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods
(i) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of any real
property;
(j) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating, reciprocal
easement or similar agreements entered into in the ordinary course of business
of Borrower and its Subsidiaries; and
(k) licenses of patents, trademarks and other Intellectual
Property rights granted by Borrower or any of its Subsidiaries in the ordinary
course of business and not interfering in any material respect with the ordinary
conduct of the business of Borrower or such Subsidiary; and
(l) mortgages securing certain parcels of real property in
favor of Agent.
"PERMITTED LIENS" means Liens permitted pursuant to SECTION 6.2(A).
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PLEDGE AGREEMENTS" means, individually or collectively, the Borrower
Pledge Agreement, the Holdings Pledge Agreement and the CRI Pledge Agreement.
"PLEDGED COLLATERAL" means the "Pledged Collateral" as defined in the
Borrower Pledge Agreement and the Holdings Pledge Agreement.
"PRIME RATE" means, for any day, a floating rate equal to the rate
publicly quoted from time to time by The Wall Street Journal as the "base rate
on corporate loans at large U.S. money center commercial banks" (or, if The Wall
Street Journal ceases quoting a base rate of the type described, the highest per
annum rate of interest published by the Federal Reserve Board in Federal Reserve
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statistical release H.15(519) entitled "Selected Interest Rates" as the Bank
prime loan rate or its equivalent). Each change in any interest rate provided
for in this Agreement based upon the Prime Rate shall take effect at the time of
such change in the Prime Rate.
"PRO RATA SHARE" means with respect to all payments, computations and
other matters relating to (a) the Revolving Loan Commitment or the Revolving
Loans of any Lender or any Letters of Credit issued or participations therein
purchased by any Lender, the percentage obtained by DIVIDING (i) the Revolving
Loan Exposure of that Lender BY (ii) the aggregate Revolving Loan Exposure of
all Lenders, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to SECTION 9.1, (b) the Term Loan A Commitment or
Term Loan A of any Lender, the percentage obtained by dividing (i) the amount of
such Lender's portion of the Term Loan A Commitment BY (ii) the aggregate amount
of the Term Loan A Commitment, and (c) the Term Loan B Commitment or Term Loan B
of any Lender, the percentage obtained by dividing (i) the amount of such
Lender's portion of the Term Loan B Commitment BY (ii) the aggregate amount of
the Term Loan B Commitment. The initial Pro Rata Share of each Lender is set
forth opposite the name of that Lender in SCHEDULE 2.1 annexed hereto.
"REAFFIRMATION AGREEMENT" means that certain reaffirmation and
amendment agreement of even date herewith, by and among Agent, Borrower and the
Subsidiaries signatory thereto, reaffirming that the Obligations, Secured
Obligations and Guaranteed Obligations, as the case may be, pursuant to the
Security Documents are the Obligations of the Borrower to the Agent and the
Lender Group pursuant to this Agreement.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means, collectively, the Term B Warrants, the
Registration Rights Agreement by and among the Borrower and the parties
signatory thereto dated as of August 3, 2001, and the Amended and Restated
Stockholders Agreement by and among the Borrower and the parties signatory
thereto dated as of June 1, 2000.
"RELATED PERSON" has the meaning assigned to such term in SECTION
2.10(G).
"RELATIONSHIP BANK" has the meaning assigned to such term in SECTION
2.10(A).
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUIRED LENDERS" means, so long as there remains any Revolving Loan
Commitment or Term Loan A Commitment, Revolving Loan, Letter of Credit
Obligations or Term A Loan outstanding, the Revolving Lenders and Term A Lenders
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having or holding 66-2/3% or more of the sum of the aggregate Revolving Loan
Exposure and Term Loan A Commitment of all Lenders, and thereafter, the Term B
Required Lenders.
"RESERVES" means reserves established against Eligible Accounts of any
Loan Party that Agent may, in its reasonable credit judgment, establish from
time to time including, without limitation Reserves for restructuring
consultants, expenses, and fees.
"RESTRICTED JUNIOR PAYMENT" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Borrower now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (b) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Borrower now
or hereafter outstanding, (c) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Borrower now or hereafter outstanding, (d) any
payment or prepayment of principal of, premium if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to any Subordinated
Indebtedness and (e) any payment of principal or interest with respect to the
Seller Notes.
"REVOLVING ADVANCE" has the meaning assigned to that term in SECTION
2.1(C).
"REVOLVING LENDER" means any Lender who has a Revolving Loan
Commitment.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Borrower pursuant to SECTION 2.1(C), and "REVOLVING LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (a) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (b) after the
termination of the Revolving Loan Commitments, the sum of (i) the aggregate
outstanding principal amount of the Revolving Loans of that Lender PLUS (ii) in
the event that Lender is an L/C Issuer, the aggregate Letter of Credit Usage in
respect of all Letters of Credit issued by that Lender (in each case net of any
participations purchased by other Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) PLUS (iii) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit.
"REVOLVING LOANS" means the Loans made by Lenders to Borrower pursuant
to SECTION 2.1(C).
"REVOLVING NOTES" means any promissory notes of Borrower issued
pursuant to SECTION 2.1(F) in substantially the form of EXHIBIT X annexed
hereto, together with any promissory notes issued by Borrower in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of any
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Lenders, in each case in form and substance satisfactory to Agent, as may be
amended, restated, supplemented or otherwise modified from time to time.
"REVOLVING/TERM A OBLIGATIONS" means all Obligations of every nature of
each Loan Party from time to time owed to the Revolving Lenders or the Term A
Lenders hereunder and under the Loan Documents (including, without limitation,
the Revolving Loan, Term Loan A and all Letters of Credit Obligations), whether
for principal, interest, fees, expenses, reimbursement (with respect to Letters
of Credit or otherwise) indemnification or otherwise, including obligations owed
to such Revolving Lenders or Term A Lenders, or their Affiliates pursuant to an
Interest Rate Agreement.
"SECURED OBLIGATIONS" has the meaning assigned to such term in the
respective Security Documents.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SECURITY AGREEMENTS" means the Borrower Security Agreement and the
Subsidiary Security Agreement.
"SECURITY DOCUMENTS" means the Borrower Pledge Agreement, the Borrower
Security Agreement, the Subsidiary Guaranty, the Subsidiary Security Agreement,
the Holdings Pledge Agreement, the CRI Pledge Agreement, and the Reaffirmation
Agreement, together with any and all other instruments, documents and
certificates delivered by any Loan Party pursuant to this Agreement or any of
the other Loan Documents in order to grant Agent, on behalf of the Lender Group,
a Lien on any real, personal or mixed property of the Loan Party as security for
the Obligations.
"SELLER NOTES" means, collectively, those certain subordinated
promissory notes issued by Borrower in favor of (a) Service Cable Electric,
Inc., a Florida corporation on May 4, 2000 in the maximum principal amount of
$1,764,000, (b) Service Cable Corporation, a Florida corporation on May 4, 2000
in the maximum principal amount of $196,000, (c) the "Shareholders of Excalibur
Cable Communications, Ltd., a Kentucky corporation" on June 1, 2000 in the
maximum principal amount of $3,287,961.96, (d) the "Shareholders of Excalibur
Cable Communications, Ltd., a Kentucky corporation" on June 1, 2000 in the
maximum principal amount of $462,636.85, (e) Xxxx X. Xxxxxx and Xxxxxxx Xxxxxx,
both individuals, on June 1, 2000 in the maximum principal amount of
$10,000,000, and (f) Xxxx X. Xxxxxx and Xxxxxxx Xxxxxx, both individuals, on
June 1, 2000 in the maximum principal amount of $6,866,481.
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"SENIOR LEVERAGE RATIO" means as of any date of determination, the
ratio of (a) the Indebtedness evidenced by this Agreement plus all Capital Lease
obligations as of such date to (b)(X) EBITDA as of the Fiscal Quarter then
ended, multiplied by (Y) four.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (a)(i) the then fair saleable value of the property of such
Person is (A) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (B) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (b) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"STATED MATURITY DATE" means the earlier to occur of (a) September 7,
2004, or (b) the date on which the Loans and other Obligations are declared
immediately due and payable in accordance with SECTION 7.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of any Loan Party
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
reasonably satisfactory to Agent.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof. On the date hereof, the following Persons are Subsidiaries of the
Borrower:
(a) Holdings;
(b) CRI;
(c) Telecrafter Acquisition Corp., a Delaware corporation;
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(d) RTK Corporation, a New Jersey corporation;
(e) Queens Cable Contractors Inc., a New Jersey corporation;
(f) CRI Cherry Hill, Inc., a Delaware corporation;
(g) PC Network Solutions, Inc. (f/k/a Viasource Northeast,
Inc.), a Delaware corporation;
(h) Excalibur Cable Communications, Ltd. (f/k/a EX
Acquisition, Inc.), a Delaware corporation;
(i) Telecore, Inc. (f/k/a TCC Acquisition, Inc.), a Delaware
corporation;
(j) Wireless & Cable Communications Group, Inc., a Delaware
corporation;
(k) DSC Acquisition, Inc., a Delaware corporation;
(l) SCC Acquisition, Inc., a Delaware corporation;
(m) QCC of Illinois, Inc., an Illinois corporation (Inactive
Subsidiary);
(n) RT/Katek Communications Group of Puerto Rico, a
corporation formed under the laws of Puerto Rico (Inactive Subsidiary); and
(o) The Drop Depot, Inc., a New Jersey corporation (Inactive
Subsidiary).
"SUBSIDIARY GUARANTOR" means each Domestic Subsidiary of Borrower
(excluding any Inactive Subsidiary), and "Subsidiary Guarantors" means all such
Subsidiary Guarantors.
"SUBSIDIARY GUARANTY" means the subsidiary guaranty executed and
delivered by each of the Subsidiary Guarantors (including Holdings) in favor of
GECC to guarantee all Obligations of the Borrower pursuant to this Agreement and
the other Loan Documents, as reaffirmed in favor of Agent by the Reaffirmation
Agreement, as amended, restated, supplemented, or otherwise modified from time
to time.
"SUBSIDIARY SECURITY AGREEMENT" means the security agreement executed
and delivered by each of Borrower's Subsidiaries granting to GECC a
first-priority security interest in all Collateral owned by each Subsidiary, as
reaffirmed in favor of Agent by the Reaffirmation Agreement, as amended,
restated, supplemented, or otherwise modified from time to time.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided, that "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
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case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"TAX BENEFIT" has the meaning assigned to that term in SECTION 2.8(B).
"TERM A LENDER" means any Lender who has a Term Loan A Commitment.
"TERM A NOTES" means, collectively, the promissory term notes of
Borrower issued to Lenders with a Term Loan A Commitment in substantially the
form of EXHIBIT Y annexed hereto, together with any promissory note issued by
Borrower pursuant to the last sentence of SECTION 8.1(B) in connection with
assignments of Term Loan A, in each case in form and substance satisfactory to
Agent, as amended, restated, supplemented or otherwise modified, re-issued or
replaced from time to time.
"TERM B LENDER" means any Lender who has a Term Loan B Commitment.
"TERM B NOTES" means, collectively, the 15% convertible promissory term
notes issued by Borrower in favor of the Lenders with a Term Loan B Commitment
in substantially the form of EXHIBIT Z annexed hereto, and in substance
satisfactory to Agent, as amended, restated, supplemented or otherwise modified,
re-issued or replaced from time to time.
"TERM B NOTE PURCHASE AGREEMENT" means that certain Term B Convertible
Note and Warrant Purchase Agreement of even date herewith by and among Borrower
and the Term B Lenders identified in SCHEDULE 1 attached thereto, with respect
to the Term B Notes.
"TERM B OBLIGATIONS" means all Obligations of every nature of each Loan
Party from time to time owed to Term B Lenders hereunder and under the Loan
Documents (including, without limitation, Term Loan B), whether for principal,
interest, fees, expenses, reimbursement indemnification or otherwise.
"TERM B REQUIRED LENDERS" has the meaning assigned to that term in
SECTION 9.6(B).
"TERM B WARRANTS" means, individually and collectively, those certain
common stock warrants issued by Borrower in favor of any Term B Lender in
connection with the making of a Term Loan B hereunder.
"TERM LOAN A" means the term loan made to Borrower pursuant to SECTION
2.1(A)(I).
"TERM LOAN A COMMITMENT" means, at any time, with respect to a Term A
Lender, the principal amount set forth beside such Term A Lender's name under
the heading "Term Loan A Commitment" on SCHEDULE 2.1 or on the Assignment
Agreement pursuant to which such Term A Lender became a Lender hereunder in
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accordance with the provisions of SECTION 9.1(B), as such Term Loan A Commitment
may be adjusted from time to time in accordance with the provisions hereof.
"TERM LOAN B" means the term loan or term loans made to Borrower
pursuant to SECTION 2.1(A)(II).
"TERM LOAN B COMMITMENT" means, at any time, with respect to a Term B
Lender, the principal amount set forth beside such Term B Lender's name under
the heading "Term Loan B Commitment" on SCHEDULE 2.1 or on the Assignment
Agreement pursuant to which such Term B Lender became a Lender hereunder in
accordance with the provisions of SECTION 9.1(B), as such Term Loan B Commitment
may be adjusted from time to time in accordance with the provisions hereof.
"TERM LOAN B MATURITY DATE" means the earlier to occur of (a) demand by
the holders of the Term B Note, which demand shall not occur prior to Xxxxx 0,
0000, (x) the fifth anniversary date of the issuance of the initial Term B Note
by Borrower, or (c) the date on which the Loans and other Obligations are
declared immediately due and payable in accordance with SECTION 7.
"TERM LOANS" means, collectively, the Term Loan A and the Term Loan B.
"TERM NOTES" means, collectively, Term A Note and Term B Note.
"TERMINATION DATE" means (a) with respect to the Revolving Loan and
Term Loan A, the Stated Maturity Date, and (b) with respect to Term Loan B, the
Term Loan B Maturity Date
"TOTAL LEVERAGE RATIO" means, as of any date of determination, the
ratio of (a) Consolidated Total Debt as of such date to (b)(X) EBITDA as of the
Fiscal Quarter then ended, multiplied by (Y) four.
"UCC" means the Uniform Commercial Code (or any other similar or
equivalent legislation, including Revised Article 9) as in effect in any
applicable jurisdiction.
"UNAPPLIED PAYMENTS" means any payment by an Account Debtor to any Loan
Party that has not been credited to the applicable Account.
"WARRANT PERCENTAGE" has the meaning assigned to that term in SECTION
2.11(B).
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Agent or Lenders pursuant to clauses
(a), (b) and (c) of SECTION 5.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
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reconciliation statements provided for in SECTION 5.1(F)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in SECTION 4.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
(a) Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
(b) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
(c) The use in any of the Loan Documents of the word "include"
or "including", when following any general statement, term or matter, shall not
be construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not non-limiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
(d) All references contained herein to this Agreement, any
other Loan Document, any Related Document or any other agreement or other
instrument shall be a reference to such agreement or instrument as it may be
amended, restated, supplemented, replaced or otherwise in a different form from
time to time in accordance with the terms thereof and hereof.
SECTION II.
THE LOANS
2.1 MAKING OF LOANS; NOTES.
(a) THE TERM LOANS.
(i) TERM LOAN A; TERM A NOTE. Pursuant to the terms
and conditions of the Original Credit Agreement and in reliance upon the
representations and warranties of Borrower therein set forth, on September 7,
1999, GECC made a term loan to Borrower (hereinafter, the "TERM LOAN A") in the
original principal amount of $15,000,000. Borrower acknowledges and agrees that
the full principal amount of Term Loan A was advanced to the Borrower under the
Original Credit Agreement. On the date hereof, the outstanding principal amount
of Term Loan A is $22,562,500 for which Borrower has executed in favor of the
Lender with a Term Loan A Commitment that certain replacement Term A Note of
even date herewith.
(ii) TERM LOAN B; TERM B NOTE. Pursuant to the terms
and conditions hereof and in reliance upon the representations and warranties of
Borrower and the other Loan Parties herein set forth and set forth in the Term B
Note Purchase Agreement, on the Closing Date Borrower and the Term B Lenders,
and upon full satisfaction of the conditions precedent set forth in SECTIONS
3.1, each Term B Lender with a Term Loan B Commitment severally agrees to make a
term loan (the "TERM LOAN B") in an amount equal to such Term B Lender's Pro
Rata Share of the Term Loan B Commitment available to Borrower in same day funds
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to an account designated by Borrower (the "DESIGNATED ACCOUNT"), which
Designated Account shall not be an escrow account and shall be used for the sole
purpose of receiving Term Loan B proceeds. Agent expressly disclaims any present
or hereafter acquired security interest it may have in the Designated Account by
way of this Agreement or the other Loan Documents to the extent of the Term Loan
B proceeds. Until the balance on such Designated Account equals zero and before
requesting a Revolving Advance pursuant to SECTION 2.1(D) hereof, Borrower shall
be required, after the Closing Date, to withdraw funds on deposit in the
Designated Account for disbursements approved in advance by the Chief
Restructuring Officer. On any date after the Closing Date the Term B Lenders
may, but shall not be required to, increase the amount of the Term Loan B
Commitment or the number and composition of the Term B Lenders (so long as such
new Term B Lender would be an Eligible Assignee), as agreed upon by the Lenders,
Agent and Borrower, by executing and delivering an amendment hereto.
Notwithstanding anything contained herein to the contrary, Agent, on behalf of
itself, the Revolving Lenders and the Term A Lenders, shall have no obligation
to make advances of the Term B Loan if the Term B Lenders fail to provide funds
to Borrower as provided herein. All amounts advanced under Term Loan B shall
constitute Obligations. On the date hereof, the aggregate outstanding principal
amount of Term Loan B is $2,450,000 for which Borrower has executed and
delivered a Term B Note in favor of each Term B Lender with a Term Loan B
Commitment, such Term B Note to be convertible into common stock of Borrower
pursuant to the terms and conditions thereof. Each Term B Lender hereby
expressly agrees that it shall not be entitled to and shall not accept payments
of principal, interest (other than pay-in-kind interest added to the principal
of such Term B Note) or fees of any kind from the Borrower or any Loan Party on
account of the Term B Obligations until the Revolving/Term A Obligations are
paid in full in cash and the Revolving Commitment and the Term Loan A Commitment
have terminated. Notwithstanding the foregoing, if any Term B Lender, in such
capacity, receives any payment or other asset of Borrower (except for additional
equity interests in Borrower or pay-in-kind interest added to the principal of
such Term B Note) or any Subsidiary that is not otherwise permitted to be paid
or delivered hereunder, including, without limitation, by way of any call
provision exercised by the Borrower pursuant to the Term B Notes, such Term B
Lender shall hold such payment or asset in trust for the Revolving Lenders and
the Term A Lenders and shall promptly deliver such payment or asset to Agent for
the benefit of the Revolving Lenders and the Term A Lenders.
(b) ALLOCATION.
(i) TERM LOAN A.
(A) On June 29, 2001, Borrower delivered the
Forbearance Warrant to GECC. In order to establish the "issue price" of the
Forbearance Warrant within the meaning of SECTION 1273(B) of the Internal
Revenue Code of 1986, as amended (the "CODE"), and for all other purposes under
the Code, Borrower and each Lender with a Term Loan A Commitment agree that the
amount of Term Loan A allocated to the Forbearance Warrant shall be $50,000. The
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Forbearance Warrant was delivered to GECC in connection with the "Forbearance
Agreement" dated June 29, 2001 as a fee for extending such forbearance.
(B) On July 6, 2001, Borrower delivered the
Amendment Warrant to GECC. In order to establish the "issue price" of the
Amendment Warrant within the meaning of the Code, and for all other purposes
under the Code, Borrower and each Lender with a Term Loan A Commitment agree
that the amount of Term Loan A allocated to the Amendment Warrant shall be
$50,000. The Amendment Warrant was delivered to GECC in connection with
"Amendment No. 7 to Amended and Restated Credit Agreement" dated July 5, 2001 as
a fee for extending such amendment.
(ii) TERM LOAN B. On the date hereof, Borrower
delivered to the Lenders with a Term Loan B Commitment, the Term B Warrants
simultaneously with the delivery of Term B Note. In order to establish the
"issue price" of the Term B Warrants within the meaning of the Code, and for all
other purposes under the Code, Borrower and each Lender with a Term Loan B
Commitment agree that the amount of Term Loan B allocated to the Term B Warrants
shall be $61,744 and the amount of Term Loan B allocated to the Term B Note
shall be $2,388,256.
(c) THE REVOLVING CREDIT FACILITY. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Borrower and the other Loan Parties herein set forth, each
Revolving Lender with a Revolving Loan Commitment severally agrees, subject to
the limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding at any one time and from time to time, to lend
to Borrower during the period from the Closing Date to but excluding the Stated
Maturity Date an aggregate amount not exceeding its Pro Rata Share of the
aggregate amount of the Revolving Loan Commitments or, in the aggregate, the
Borrowing Availability to be used for the purposes set forth in SECTION 2.6.
Notwithstanding anything contained herein to the contrary no Revolving Advance
(as defined below) shall be made hereunder unless (a) no Default or Event of
Default has occurred and is continuing, and (b) there are no funds available in
the Designated Account pursuant to SECTION 2.1(A)(II). The amount of each
Revolving Lender's Revolving Loan Commitment is set forth opposite its name on
SCHEDULE 2.1 annexed hereto and the aggregate amount of the Revolving Loan
Commitments is $18,950,000; PROVIDED, that if, on or before August 16, 2001, the
aggregate amount of the funded Term Loan B, by amendment or otherwise, is
increased as set forth and pursuant to the terms of Section 2.1(a)(ii), the
Revolving Lenders agree to increase, on a pro-rata basis, their Revolving
Commitment in an aggregate amount not to exceed the LESSER of (x)$550,000, and
(y) the amount of the increase in the funded Term Loan B as referred to above;
PROVIDED, HOWEVER, that the Revolving Loan Commitment of each Revolving Lender
shall be adjusted to give effect to any assignments of the Revolving Loan
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Commitments pursuant to SECTION 9.1(B); and PROVIDED, FURTHER, that the amount
of the Revolving Loan Commitments shall be reduced from time to time by the
amount of any reductions thereto made pursuant to SECTION 2.4(C). Each Revolving
Lender's Revolving Loan Commitment shall expire on the Stated Maturity Date and
all Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be paid in full not
later than the Stated Maturity Date. Amounts borrowed under this SECTION 2.1(C)
may be repaid and reborrowed to but excluding the Stated Maturity Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Revolving Loans and the Revolving Loan Commitments shall be subject to the
limitation, that in no event shall the total amount of outstanding Revolving
Loans at any time exceed the Revolving Loan Commitments then in effect (each a
"REVOLVING ADVANCE") or the Borrowing Availability.
(d) BORROWING MECHANICS. Except with respect to automatic
Revolving Advances made pursuant to SECTION 2.3(b), Borrower shall deliver to
Agent a Notice of Borrowing no later than 10:00 A.M. (New York time) at least
three Business Days in advance of the date of each proposed Revolving Advance
(in the case of a LIBOR Rate Loan) or at least one Business Day in advance of
the date of each proposed Revolving Advance (in the case of a Base Rate Loan). A
Revolving Advance may be continued as or converted into a Base Rate Loan or
LIBOR Rate Loan in the manner provided in SECTION 2.2(D). Each Notice of
Borrowing must be given in writing (by telecopy or overnight courier) and shall
include the information required in EXHIBIT F, and such other information as may
be required by Agent. If Borrower desires to have the Revolving Advances bear
interest by reference to a LIBOR Rate, it must comply with the provisions of
SECTION 2.2, including SECTION 2.2(D). Borrower shall notify Agent prior to the
funding of any Loans in the event that any of the matters to which Borrower is
required to certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable Funding Date, and the acceptance by Borrower of the
proceeds of any Loans shall constitute a re-certification by Borrower, as of the
applicable Funding Date, as to the matters to which Borrower is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in SECTIONS 2.7(B), 2.7(C) and 2.6(G), a
Notice of Borrowing for a LIBOR Rate Loan shall be irrevocable on and after the
related Interest Rate Determination Date, and Borrower shall be bound to make a
borrowing in accordance therewith.
(e) DISBURSEMENT OF FUNDS. All Revolving Loans under this
Agreement shall be made by the Lenders with a Revolving Loan Commitment
simultaneously and proportionately to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder nor
shall the Commitment of any Lender to make the particular type of Loan requested
be increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder. Promptly after
receipt by Agent of a Notice of Borrowing pursuant to SECTION 2.1(D), Agent
shall notify each Lender of the proposed borrowing. Each Lender shall make the
amount of its Loan available to Agent not later than 12:00 Noon (New York time)
on the applicable Funding Date in same day funds in Dollars, at the Funding and
Payment Office. Except as provided in SECTION 2.3 with respect to Revolving
Loans used to reimburse any L/C Issuer for the amount of a drawing under a
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Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in SECTION 3.1 (in the case of Loans made on the Closing
Date), SECTION 3.3 (in the case of all Loans) and SECTION 3.4 (in the case of
Letters of Credit), Agent shall make the proceeds of such Revolving Loans
available to Borrower on the applicable Funding Date by causing an amount of
same day funds in Dollars equal to the proceeds of all such Revolving Loans
received by Agent from Revolving Lenders to be credited to the account of
Borrower.
Unless Agent shall have been notified by any Lender prior to the
Funding Date for any Loans that such Lender does not intend to make available to
Agent the amount of such Lender's Loan requested on such Funding Date, Agent may
assume that such Lender has made such amount available to Agent on such Funding
Date and Agent may, in its sole discretion, but shall not be obligated to, make
available to Borrower a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Agent by such Lender,
Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from such Funding Date until
the date such amount is paid to Agent, at the customary rate set by Agent for
the correction of errors among banks for three Business Days and thereafter at
the Base Rate. If such Lender does not pay such corresponding amount forthwith
upon Agent's demand therefor, Agent shall promptly notify Borrower and Borrower
shall immediately pay such corresponding amount to Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to Agent, at the rate payable under this Agreement for Base Rate Loans. Nothing
in this SECTION 2.1(E) shall be deemed to relieve any Lender from its obligation
to fulfill its Commitments hereunder or to prejudice any rights that Borrower
may have against any Lender as a result of any default by such Lender hereunder.
(f) REVOLVING NOTE. Borrower shall execute and deliver on the
Closing Date in favor of each Revolving Lender a Revolving Note to evidence such
Revolving Lender's Revolving Loans, in the principal amount of that Revolving
Lender's Revolving Loan Commitment. Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been accepted
by Agent as provided in SECTION 9.1(B)(II). Any request, authority or consent of
any person or entity who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, assignee or transferee of that Note or of any Note or
Notes issued in exchange therefor.
2.2 INTEREST ON THE LOANS.
(a) RATE OF INTEREST.
(i) THE REVOLVING LOAN AND TERM LOAN A. Subject to
the provisions of SECTIONS 2.7 and 2.8, the Loans, except for Term Loan B, shall
bear interest on the unpaid principal amount thereof from the date made until
paid in full (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Adjusted LIBOR Rate. The applicable basis for
determining the rate of interest for any Revolving Advance shall be selected by
Borrower at the time of delivery of a Notice of Borrowing pursuant to SECTION
2.1(D).
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Subject to the provisions of SECTIONS 2.2(E) and 2.8, the Loans, except
for Term Loan B, shall bear interest until paid in full as follows:
(A) if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Margin per annum; or
(B) if a LIBOR Rate Loan, then at the sum of the Adjusted
LIBOR Rate PLUS the Applicable Margin per annum.
The "APPLICABLE MARGIN" for the Revolving Loan and Term Loan A that are
Base Rate Loans and LIBOR Rate Loans shall be determined quarterly, based upon
the calculation of the Total Leverage Ratio for the prior Fiscal Quarter, any
change in such Applicable Margin to be effective after the Borrower delivers
quarterly financial statements to Agent pursuant to SECTION 5.1(C) with the
first such measurement of the Total Leverage Ratio to be retroactive to June 30,
2001, as follows:
------------------------------------- ----------------------------------- -----------------------------------
TOTAL LEVERAGE RATIO APPLICABLE MARGIN FOR LIBOR RATE APPLICABLE MARGIN FOR
LOANS BASE RATE LOANS
------------------------------------- ----------------------------------- -----------------------------------
Total Leverage less than 4.25x 3.25% 1.75%
------------------------------------- ----------------------------------- -----------------------------------
total Leverage greater than or 4.00% 2.50%
equal to 4.25x but less than 5.25x
------------------------------------- ----------------------------------- -----------------------------------
Total Leverage greater than or 4.50% 3.00%
equal to 5.25x but less than 6.25x
------------------------------------- ----------------------------------- -----------------------------------
Total Leverage greater than or 7.00% 5.50%
equal to 6.25x
------------------------------------- ----------------------------------- -----------------------------------
(ii) TERM LOAN B. Term Loan B shall bear interest on
the unpaid principal amount thereof from the date made until paid in full
(whether by acceleration or otherwise) at a rate of fifteen percent (15%) per
annum calculated as provided in SECTION 2.2(F) and on terms and conditions
specified in the Term B Note, it being understood that the accrued interest
shall be calculated semi-annually and then added to the then-outstanding
principal amount of the Term Loan B on each February 1 and August 1, commencing
on February 1, 2002, as pay-in-kind interest, and interest shall accrue
thereafter on the increased principal amount at the rate applicable to Term Loan
B.
(b) INTEREST PERIODS FOR THE REVOLVING LOAN AND TERM LOAN A.
In connection with a LIBOR Rate Loan, the interest period (each an "INTEREST
PERIOD") to be applicable to the Revolving Loan or Term Loan A shall be a one
(1)-month period only; PROVIDED, that:
(i) in the case of immediately successive Interest
Periods applicable to a LIBOR Rate Loan continued as such pursuant to a Notice
of Conversion/Continuation, each successive Interest Period shall commence on
the day on which the next preceding Interest Period expires;
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(ii) if an Interest Period would otherwise expire on
a day that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, that, if any Interest Period would otherwise
expire on a day that is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(iv) no Interest Period with respect to any portion
of the Revolving Loan or Term Loan A shall extend beyond the Stated Maturity
Date.
(c) INTEREST PAYMENTS ON THE REVOLVING LOAN AND TERM LOAN A.
At any time that a LIBOR Rate Loan is outstanding, but subject to the provisions
of SECTION 2.2(E), interest on such Loans shall be due and payable, in arrears,
on the first day of each calendar month at any time that the Revolving Loans or
Term Loan A are outstanding, PROVIDED that the portion of interest on LIBOR Rate
Loans accruing at a rate in excess of the LIBOR Rate plus 5.00% and that portion
of interest on Base Rate Loans at a rate in excess of the Base Rate plus 3.50%
shall not be payable in cash, but instead shall accrue (and compound at the
LIBOR Rate or Base Rate plus the Applicable Margin as in effect from time to
time and in the manner provided with respect to LIBOR Rate Loans or Base Rate
Loans, as applicable) and be payable in cash upon the earliest to occur of (x)
March 31, 2002 and (y) the Stated Maturity Date.
(d) CONVERSION OR CONTINUATION OF THE REVOLVING LOAN OR TERM
LOAN A. Subject to the provisions of SECTION 2.7, Borrower shall have the option
(i) to convert, at any time, a Revolving Loan or Term Loan A bearing interest at
a rate determined by reference to one basis to the alternative basis or (ii)
upon the expiration of an Interest Period applicable to a Loan bearing interest
at the LIBOR Rate, to continue a Loan as a LIBOR Rate Loan; provided, however,
that a LIBOR Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto; and provided, further,
that no Revolving Loan or Term Loan A may be made as or converted into a Base
Rate Loan during the period from December 24 of any year to and including
January 7 of the immediately succeeding year for the purpose of investing in
Securities bearing interest at a rate determined by reference to any other basis
for the purpose of arbitrage or speculation.
Borrower shall deliver a Notice of Conversion/Continuation to Agent no
later than 10:00 A.M. (New York time) at least one Business Day in advance of
the proposed conversion date (in the case of a conversion to a Base Rate Loan)
and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a LIBOR Rate Loan). A Notice of Conversion/Continuation shall specify (i)
the proposed conversion/continuation date (which shall be a Business Day), (ii)
the amount and type of the Loan to be converted/continued, (iii) the nature of
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the proposed conversion/continuation, (iv) in the case of a conversion to, or a
continuation of, a LIBOR Rate Loan, that no Default or Event of Default has
occurred and is continuing. With respect to each such LIBOR Rate Loan, such
LIBOR Rate Loan will be for a maximum of a one- (1) month period. In lieu of
delivering the above-described Notice of Conversion/Continuation, Borrower may
give Agent telephonic notice by the required time of any proposed
conversion/continuation under this SECTION 2.2(D); provided, that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Agent on or before the proposed
conversion/continuation date, and provided, further, that no more than five
LIBOR Rate Loans shall be outstanding at any one time. If Borrower fails to
provide such notice, such Loan shall be deemed to be a Base Rate Loan.
Neither Agent nor any Lender shall incur any liability to Borrower in
acting upon any telephonic notice referred to above that Agent believes in good
faith to have been given by a duly authorized officer or other person authorized
to act on behalf of Borrower or for otherwise acting in good faith under this
SECTION 2.2(D), and upon conversion or continuation of the applicable basis for
determining the interest rate with respect to a Loan in accordance with this
Agreement pursuant to any such telephonic notice Borrower shall have effected a
conversion or continuation, as the case may be, hereunder.
Except as otherwise provided in SECTIONS 2.7(B), 2.7(C) and 2.7(G), a
Notice of Conversion/Continuation for conversion to, or continuation of, a LIBOR
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Borrower shall be bound
to effect a conversion or continuation in accordance therewith.
(e) DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of the
Loans, and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is two percent (2%) per annum in excess of
the interest rate otherwise payable under this Agreement (the "DEFAULT RATE")
with respect to the Loans (or, in the case of any such fees and other amounts,
at a rate which is two percent (2%) per annum in excess of the interest rate
otherwise payable under this Agreement for a Term Loan A that is a Base Rate
Loan); provided, that, in the case of a LIBOR Rate Loan, upon the expiration of
the Interest Period in effect at the time any such increase in interest rate is
effective such LIBOR Rate Loan shall thereupon become a Base Rate Loan and shall
thereafter bear interest payable upon demand at a rate which is two percent (2%)
per annum in excess of the interest rate otherwise payable under this Agreement
for a Term Loan A that is Base Rate Loan. Payment or acceptance of the increased
rates of interest provided for in this SECTION 2.2(E) is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Agent or any
Lender.
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(f) COMPUTATION OF INTEREST. Interest on the Loans shall be
computed (i) in the case of a Base Rate Loan, or in the case of Term Loan B, on
the basis of a 365-day or 366-day year, as the case may be, and (ii) in the case
of a LIBOR Rate Loan, on the basis of a 360-day year, in each case for the
actual number of days elapsed in the period during which it accrues. In
computing interest on the Loans, the date of the making of such Loan or the
first day of an Interest Period applicable to such Loan (or, in the case of Term
Loan B, the first day on which interest shall be computed) or, with respect to a
Base Rate Loan being converted from a LIBOR Rate Loan, the date of conversion of
such LIBOR Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a LIBOR Rate Loan, the date of conversion of such Base Rate
Loan to such LIBOR Rate Loan, as the case may be, shall be excluded; provided,
that if a Loan is repaid on the same day on which it is made, one day's interest
shall be paid on that Loan.
2.3 LETTERS OF CREDIT.
(a) ISSUANCE. Subject to the terms and conditions of this
Agreement, the Revolving Lenders agree to incur, from time to time prior to the
Stated Maturity Date, upon the request of Borrower and for the account of
Borrower or a Subsidiary, Letter of Credit Obligations by causing Letters of
Credit to be issued (by a bank or other legally authorized Person selected by or
acceptable to Borrower and acceptable to Agent in its sole discretion (each, an
"L/C ISSUER")) naming as account party Borrower or a Subsidiary, in each case
guaranteed by such Revolving Lender. The aggregate amount of all such Letter of
Credit Obligations shall not at any time exceed the lesser of (i) $1,760,000
(the "L/C SUBLIMIT"), and (ii) the Revolving Commitment minus the aggregate
outstanding principal balance of the Revolving Advances. No such Letter of
Credit shall have an expiry date which is more than one year following the date
of issuance thereof, and the L/C Issuer shall not be under any obligation to
incur Letter of Credit Obligations in respect of any Letter of Credit having an
expiry date which is later than the Stated Maturity Date.
(b) ADVANCES AUTOMATIC. In the event that any Revolving Lender
shall make any payment on or pursuant to any Letter of Credit Obligation, such
payment shall then be deemed automatically to constitute a Revolving Advance
under SECTION 2.1(C) hereof regardless of whether a Default or Event of Default
shall have occurred and be continuing and notwithstanding Borrower's failure to
satisfy the conditions precedent set forth herein.
(c) CASH COLLATERAL. If Borrower is required to provide cash
collateral for any Letter of Credit Obligations pursuant to this Agreement prior
to the Stated Maturity Date, Borrower will pay to the Agent for the benefit of
the Revolving Lender or L/C Issuer, cash or Cash Equivalents in an amount equal
to 105% of the maximum amount then available to be drawn under each applicable
Letter of Credit outstanding. Such funds or Cash Equivalents shall be held by
Agent in a cash collateral account (the "CASH COLLATERAL ACCOUNT") maintained at
a bank or financial institution acceptable to Agent. The Cash Collateral Account
shall be in the name of Borrower and shall be pledged to, and subject to the
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control of and in a manner satisfactory to Agent. Borrower hereby pledges and
grants to Agent a security interest in all such funds and Cash Equivalents held
in the Cash Collateral Account from time to time, and all proceeds thereof, as
security for the payment of all amounts due in respect of the Letter of Credit
Obligations and other Obligations, whether or not then due.
If any Letter of Credit Obligations, whether or not then due and
payable, shall for any reason be outstanding on the Stated Maturity Date,
Borrower shall either (i) provide cash collateral therefor in the manner
described above, (ii) cause all such Letters of Credit and guaranties thereof to
be canceled and returned, or (iii) deliver a stand-by letter (or letters) of
credit in guarantee of such Letter of Credit Obligations, which stand-by letter
(or letters) of credit shall be of like tenor and duration as, and in an amount
equal to 105% of the aggregate maximum amount then available to be drawn under,
the Letters of Credit to which such outstanding Letter of Credit Obligations
relate and shall be issued by a bank or financial institution, and shall be
subject to such terms and conditions, in each case, satisfactory to Agent in its
sole discretion.
From time to time after funds are deposited in the Cash Collateral
Account by Borrower, whether before or after the Stated Maturity Date, Agent may
apply such funds or Cash Equivalents then held in the Cash Collateral Account to
the payment of any Obligations, in such order as Agent may elect, as shall be or
shall become due and payable by Borrower to the L/C Issuer or Agent with respect
to such Letter of Credit Obligations and, upon the satisfaction in full of all
Letter of Credit Obligations, to any other Obligations then due and payable.
Neither Borrower nor any Person claiming on behalf of or through
Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by Borrower
to Agent in respect thereof, any funds remaining in the Cash Collateral Account
shall be applied to other Obligations when due and owing and upon payment in
full of such Obligations, any remaining amount shall be paid to Borrower or as
otherwise required by law.
(d) FEES AND EXPENSES. Borrower agrees to pay to Agent for
Letter of Credit Obligations incurred hereunder, (i) all costs and expenses
incurred, for the benefit of itself and the L/C Issuer, on account of such
Letter of Credit Obligations, and (ii) for each month during which any Letter of
Credit Obligation shall remain outstanding, a fee (the "LETTER OF CREDIT FEE")
in an amount equal to the per annum rate of the Applicable Margin for Revolving
Loans that are LIBOR Rate Loans multiplied by the maximum amount available from
time to time to be drawn under the applicable Letter of Credit. Such fee shall
be paid to Agent in arrears, on the first day of each month. In addition,
Borrower shall pay to any L/C Issuer, on demand, such fees (including all per
annum fees), charges and expenses of such L/C Issuer in respect of the issuance,
negotiation, acceptance, amendment, transfer and payment of such Letter of
Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
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(e) REQUEST FOR INCURRENCE OF LETTER OF CREDIT OBLIGATIONS.
Borrower shall give Agent and L/C Issuer at least two Business Days prior
written notice requesting the incurrence of any Letter of Credit Obligation,
specifying the date such Letter of Credit Obligation is to be incurred,
identifying the beneficiary to which such Letter of Credit Obligation relates
and describing the nature of the transactions proposed to be supported thereby.
The notice shall be accompanied by the form of the Letter of Credit (which shall
be acceptable to Agent and L/C Issuer) to be guaranteed. Notwithstanding
anything contained herein to the contrary, Letter of Credit applications by
Borrower and approvals by Agent and L/C Issuer may be made and transmitted
pursuant to electronic codes and security measures mutually agreed upon and
established by and among Borrower, Agent and L/C Issuer.
(f) OBLIGATIONS ABSOLUTE. The obligation of Borrower to
reimburse Agent and L/C Issuer for payments made with respect to any Letter of
Credit Obligation shall be absolute, unconditional and irrevocable, without
necessity of presentment, demand, protest or other formalities. Such obligations
of Borrower shall be paid strictly in accordance with the terms hereof under all
circumstances including the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit, the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, set-off, defense or
other right which Borrower or any of its Affiliates, Agent or L/C Issuer may at
any time have against a beneficiary or any transferee of any Letter of Credit
(or any Persons or entities for whom any such transferee may be acting), Agent,
or any other Person, whether in connection with the Agreement, the Letter of
Credit, the transactions contemplated herein or therein or any unrelated
transaction (including any underlying transaction between Borrower or any of its
Affiliates and the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly
provided in paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of
Credit or guaranty thereof against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit or such guaranty; (v) any other circumstance or happening
whatsoever, which is similar to any of the foregoing; or
(vi) the fact that a Default or an Event of Default
shall have occurred and be continuing.
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(g) INDEMNIFICATION; NATURE OF AGENT'S DUTIES.
(i) In addition to amounts payable as elsewhere
provided in the Agreement, Borrower hereby agrees to pay and to protect,
indemnify, and save harmless Agent from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including attorneys'
fees) which Agent may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or guaranty thereof, or
(B) the failure of Agent seeking indemnification or of any L/C Issuer to honor a
demand for payment under any Letter of Credit or guaranty thereof as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jeure or de facto government or governmental authority, in each case other than
to the extent solely as a result of the gross negligence or willful misconduct
of Agent (as finally determined by a court of competent jurisdiction).
(ii) As between Agent and Borrower, Borrower assumes
all risks of the acts and omissions of, or misuse of any Letter of Credit by
beneficiaries of any Letter of Credit. In furtherance and not in limitation of
the foregoing, to the fullest extent permitted by law Agent shall not be
responsible: (A) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document issued by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (B) for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (C) for failure of the beneficiary
of any Letter of Credit to comply fully with conditions required in order to
demand payment under such Letter of Credit; provided, that, in the case of any
payment by Agent or the L/C Issuer under any Letter of Credit or guaranty
thereof, Agent or the L/C Issuer shall be liable to the extent such payment was
made solely as a result of its gross negligence or willful misconduct (as
finally determined by a court of competent jurisdiction) in determining that the
demand for payment under such Letter of Credit or guaranty thereof complies on
its face with any applicable requirements for a demand for payment under such
Letter of Credit or guaranty thereof; (D) for errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (E) for errors
in interpretation of technical terms; (F) for any loss or delay in the
transmission or otherwise of any document required in order to make a payment
under any Letter of Credit or guaranty thereof or of the proceeds thereof; (G)
for the credit of the proceeds of any drawing under any Letter of Credit or
guaranty thereof; and (H) for any consequences arising from causes beyond the
control of Agent. None of the above shall affect, impair, or prevent the vesting
of any of Agent's rights or powers hereunder or under the Agreement.
(iii) nothing contained herein shall be deemed to
limit or to expand any waivers, covenants or indemnities contained in any letter
of credit application, reimbursement agreement or similar document, instrument
or agreement between Borrower and such L/C Issuer.
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2.4 APPLICATION OF PAYMENTS, REPAYMENTS, PREPAYMENTS AND REDEMPTION OF
LOAN; GENERAL PROVISIONS REGARDING PAYMENTS.
(a) REPAYMENT OF LOANS.
(i) THE REVOLVING LOAN AND TERM LOAN A. The aggregate
principal amount of, and interest on, the Revolving Loan shall be due and
payable in full on the Stated Maturity Date.
(ii) TERM LOAN B. The aggregate principal amount of,
and interest on, the Term Loan B shall be due and payable in full on the Term
Loan B Maturity Date. Except as set forth in SECTION 2.4(B), the Term Loan B may
not be prepaid in part at any time of this Agreement and may be repaid in full
only in accordance with SECTION 2.1(A)(II).
(b) VOLUNTARY PREPAYMENTS. Borrower may, at any time and from
time to time (i) voluntarily prepay all or part of Term Loan A, or (ii)
voluntarily prepay all or part of the Revolving Loan on any Business Day in
whole, except as applied to prepay such Revolving Loans pursuant to SECTION 2.4,
or in part in an aggregate minimum amount of $100,000 and integral multiples of
$100,000 in excess of that amount; provided, that if such prepayment does not
occur on the expiration of the Interest Period applicable thereto, Agent shall
be entitled to receive Breakage Costs from Borrower. Each partial prepayment
shall designate the Loan or other Obligations (except for the Term Loan B) to
which such prepayment is to be applied, provided, that amounts repaid on Term
Loan A pursuant to this Section shall be applied to Term Loan A in inverse order
of scheduled maturity. Amounts prepaid on Term Loan A may not be reborrowed.
Borrower may voluntarily prepay all or part of the Term Loan B at any time after
all Revolving/Term Loan A Obligations have been paid in full in cash and the
Revolving Commitment and Term Loan A Commitment have terminated. Term Loan B may
not be reborrowed.
(c) TERMINATION OR REDUCTION OF REVOLVING COMMITMENT. Borrower
may at any time on at least ten days' prior written notice to Agent terminate or
reduce the Revolving Commitment or the L/C Sublimit in whole or in part in an
aggregate minimum amount of $100,000 and integral multiples of $100,000 in
excess of that amount and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Borrower's notice and
shall reduce the Revolving Loan Commitment of each Lender proportionately to its
Pro Rata Share; provided, that the Revolving Commitment shall not be reduced to
an amount less than the L/C Sublimit, and provided, further, in no event shall
the L/C Sublimit be reduced or terminated below the amount of Letter of Credit
Obligations outstanding as of such date. Simultaneously (and as a condition to)
such termination or reduction of the Revolving Commitment or the L/C Sublimit,
all Revolving Loans and other Obligations in excess of the Revolving Commitment
(as so reduced) shall be immediately due and payable in full. If such payment
does not occur on the expiration of the Interest Period applicable thereto,
Agent shall be entitled to receive Breakage Costs from Borrower. Upon any such
prepayment and reduction or termination of the Revolving Commitment or the L/C
Sublimit, Borrower's right to request Revolving Advances, or request that Letter
of Credit Obligations (and the related L/C Sublimit) be incurred on its behalf
shall simultaneously be permanently reduced or terminated, as the case may be.
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(d) PREPAYMENT PREMIUM. Intentionally Omitted.
(e) SCHEDULED MANDATORY PREPAYMENTS. Borrower shall, until
payment in full of Term Loan A and subject to earlier prepayment and payment as
hereinafter provided, make installment payments in respect of the principal of
Term Loan A to Agent on the dates (unless such date is not a Business Day, in
which case, such payment shall be made on the next succeeding Business Day) and
in the amounts set forth below.
PAYMENT DATE INSTALLMENT AMOUNT
------------ ------------------
December 31, 2000, March 31, 2001 $468,750
September 25, 2001 and October 26, 2001
December 26, 2001, March 26, 2002
June 25, 2002, September 25, 2002 $937,500
December 26, 2002, March 26, 2003
June 25, 2003 and September 25, 2003
December 26, 2003, March 26, 2004 $1,406,250
June 25, 2004
September 7, 2004 the amount necessary to
repay Term Loan A in full
PROVIDED, HOWEVER, that on or before March 31, 2002 in addition to the payments
required in the table above, Borrower shall make a prepayment in respect of
principal on Term Loan A in the amount of $3,000,000, which prepayment shall be
applied to the Term Loan A in inverse order of scheduled maturity, and PROVIDED,
FURTHER, that the last such installment shall be in the amount necessary to
repay in full the unpaid principal amount of Term Loan A.
(f) MANDATORY PREPAYMENTS -- ASSET SALES. Borrower shall,
until payment in full of Term Loan A and subject to earlier prepayment and
payment as hereinafter provided, make prepayments in respect of the principal of
Term Loan A to Agent concurrently with any Asset Sale, in an amount equal to the
Net Cash Proceeds of such Asset Sale, as follows: first, to Term Loan A, until
Term Loan A is paid in full, and second, to the Revolving Loan (and in permanent
reduction of the Revolving Commitment), until the Revolving Loan is paid in full
(and the Revolving Commitment is reduced to zero). Amounts repaid pursuant to
this Section shall be applied on Term Loan A in inverse order of scheduled
maturity.
(g) MANDATORY PREPAYMENTS - ISSUANCES AND TERM B NOTES.
Borrower shall, until payment in full of Term Loan A and subject to earlier
prepayment and payment as hereinafter provided, make a prepayment in respect of
the principal of Term Loan A to Agent, of a percentage of the Net Cash Proceeds
of all Issuances (other than Issuances for which the proceeds are used as
permitted by SECTION 6.4(III) hereof) and all Term B Notes in the aggregate, in
an amount set forth, and payable on the prepayment dates set forth below:
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AGGREGATE AMOUNT OF NET PERCENTAGE OF NET CASH
CASH PROCEEDS FROM SUCH PROCEEDS FROM SUCH ISSUANCE
ISSUANCE AND TERM B NOTES AND TERM B NOTES TO BE
PLUS ALL PRIOR AND APPLIED AS PREPAYMENT
SIMULTANEOUS ISSUANCES OF TERM LOAN A PREPAYMENT DATE
less than $4,000,000 0% N/A
$4,000,001 to $6,000,000 100% of Net Cash Proceeds in concurrent with the Issuance or
excess of $4,000,000 Term B Note that meets or exceeds
the aggregate amount
$6,000,001 to $7,000,000 33-1/3% concurrent with the Issuance or
of Net Cash Proceeds in Term B Note that meets or exceeds
excess of $6,000,000 the aggregate amount
greater than $7,000,000 100% of Net Cash Proceeds in concurrent with the Issuance or
excess of $7,000,000 Term B Note that meets or exceeds
the aggregate amount
Amounts repaid pursuant to this Section shall be applied on Term Loan A in
inverse order of scheduled maturity.
(h) MANDATORY PREPAYMENTS -- CONSOLIDATED EXCESS CASH FLOW.
Borrower shall, until payment in full of Term Loan A and subject to earlier
prepayment and payment as hereinafter provided, make prepayments in respect of
the principal of Term Loan A to Agent, for the benefit of Term A Lenders, not
later than 90 days following the end of each Fiscal Year, a prepayment equal to
50% of Consolidated Excess Cash Flow. Amounts repaid pursuant to this section
shall be applied to Term Loan A in inverse order of scheduled maturity.
(i) GENERAL PROVISIONS REGARDING PAYMENTS.
(i) MANNER AND TIME OF PAYMENT. All payments by
Borrower of principal, interest, fees and other Obligations hereunder and under
the Notes shall be made in Dollars in same day funds, without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to Agent not
later than 12:00 Noon (New York time) on the date due at the Funding and Payment
Office; funds received by Agent after that time on such due date shall be deemed
to have been paid by Borrower on the next succeeding Business Day.
(ii) PAYMENTS ON BUSINESS DAYS. Whenever any payment
to be made hereunder shall be stated to be due on a day that is not a Business
Day, such payment shall be made on the next succeeding Business Day and such
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extension of time shall be included in the computation of the payment of
interest hereunder or of fees hereunder, as the case may be.
(iii) NOTATION OF PAYMENT. Each Lender agrees that
before disposing of the Notes held by it, or any part thereof (other than by
granting participations therein), that such Lender will make a notation thereon
of all principal payments previously made thereon and of the date to which
interest thereon has been paid; provided, that the failure to make (or any error
in the making of) any notation under any Note shall not limit or otherwise
affect the obligations of Borrower hereunder or under such Note with respect to
the unpaid portion of the Obligations.
(j) APPLICATION OF PAYMENTS AND PROCEEDS OF COLLATERAL.
(i) APPLICATION OF PAYMENTS EXCEPT UPON THE
OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT. Except upon the
occurrence and continuation of an Event of Default, all payments received by
Agent (not relating to or constituting (A) principal or interest on specific
Loans (except Term Loan B) including Net Cash Proceeds of an Asset Sales which
shall be applied as set forth in Section 2.4(f), or (B) specific fees), shall be
applied, FIRST, to pay any fees or expense reimbursements then due to Agent from
Borrower until paid in full, SECOND, to pay any fees or expense reimbursements
due to the Revolving Lenders or the Term A Lenders from Borrower until paid in
full, THIRD, to pay interest due in all respects on the Revolving Advances until
paid in full, FOURTH, to pay principal on the Revolving Advances and
unreimbursed obligations in respect of Letters of Credit until paid in full,
FIFTH, to pay interest due in all respects on the Term Loan A until paid in
full, SIXTH, to pay principal on the Term Loan A until paid in full, SEVENTH, to
all other Obligations owed to the Revolving Lenders and the Term A Lenders until
paid in full, and PROVIDED that the Revolving Loan, Letter of Credit Obligations
and Term Loan A are paid in full and the Revolving Commitment and Term Loan A
Commitment have been terminated, EIGHTH to pay any fees or expense
reimbursements due to the Term B Lenders from Borrower, NINTH, to pay interest
on the Term Loan B, TENTH, to pay principal on the Term Loan B, and ELEVENTH, to
the extent of any excess, to the payment to or upon the order of such Loan Party
or to whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(ii) APPLICATION OF PAYMENTS UPON THE OCCURRENCE AND
DURING THE CONTINUATION OF AN EVENT OF DEFAULT. Upon the occurrence and during
the continuation of an Event of Default, all payments received by Agent
(including, without limitation, in respect of any sale of, collection from, or
other realization upon all of or any part of the Collateral under any Security
Documents or otherwise), except as otherwise provided herein, shall be applied,
FIRST, to pay any fees or expense reimbursements then due to Agent from Borrower
until paid in full, SECOND, to pay any fees or expense reimbursements due to the
Revolving Lenders or the Term A Lenders from Borrower until paid in full, THIRD,
to pay interest due in all respects on the Revolving Advances and the Term Loan
A and all amounts owing under the Letters of Credit which have not been cash
collateralized, on a pro-rata basis until paid in full, FOURTH, to pay principal
due in all respects on the Revolving Advances and the Term Loan A on a pro-rata
basis until paid in full, FIFTH, to all other Obligations owed to the Revolving
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Lenders and the Term A Lenders until paid in full, and PROVIDED that the
Revolving Loan, Letter of Credit Obligations and Term Loan A are paid in full
and the Revolving Commitment and Term Loan A Commitment have been terminated,
SIXTH to pay any fees or expense reimbursements due to the Term B Lenders from
Borrower, SEVENTH, to pay interest on the Term Loan B, EIGHTH, to pay principal
on the Term Loan B, and NINTH, to the extent of any excess to the payment to or
upon the order of such Loan Party or to whosoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
2.5 UNUSED FACILITY FEE. Borrower agrees to pay to Agent, for the
ratable benefit of each Revolving Lender, in arrears, on the first Business Day
of each month prior to the Stated Maturity Date, and on such date, a fee for
Borrower's non-use of available funds under the Revolving Loan facility in an
amount equal to 0.50% per annum (calculated on the basis of a 360-day year for
actual days elapsed) of the difference between (a) the Revolving Commitment (as
it may be reduced from time to time) and (b) the average for the period of the
daily closing balances of the Revolving Loan outstanding during the period for
which such fee is due.
2.6 USE OF PROCEEDS.
(a) REVOLVING LOAN. The proceeds of Revolving Loans shall be
applied by Borrower for working capital needs, capital expenditures (each, to
the extent permitted hereunder) and other general corporate purposes of Borrower
and its Subsidiaries.
(b) TERM LOAN B. The proceeds of Term Loan B shall be applied
by Borrower for disbursements approved in advance by the Chief Restructuring
Officer. Borrower shall be required to draw the balance of the Designated
Account into which the proceeds of Term Loan B are deposited to zero before
requesting a Revolving Advance pursuant to SECTION 2.1(D).
(c) MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Borrower or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.7 SPECIAL PROVISIONS GOVERNING LIBOR RATE LOAN.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to a LIBOR Rate Loan as to
the matters covered:
(a) DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate Determination
Date, Agent shall determine (which determination shall, absent manifest error,
be final, conclusive and binding upon all parties) the interest rate that shall
apply to the LIBOR Rate Loan for which an interest rate is then being determined
for the applicable (as designated by Borrower) 1-month Interest Period and shall
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promptly give notice thereof (in writing or by telephone confirmed in writing)
to Borrower and each Revolving Lender and Term A Lender.
(b) INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the
event that Agent shall have determined (which determination shall be final and
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to a LIBOR Rate Loan, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to the Loans on the
basis provided for in the definition of Adjusted LIBOR Rate, Agent shall on such
date give notice (by telefacsimile or by telephone confirmed in writing) to
Borrower and each Lender of such determination, whereupon (i) such Loan may not
be made as, or converted to, a LIBOR Rate Loan until such time as Agent notifies
Borrower, the Revolving Lenders, and the Term A Lenders that the circumstances
giving rise to such notice no longer exist and (ii) any Notice of Borrowing or
Notice of Conversion/Continuation given by Borrower with respect to a Loan
(except Term Loan B) in respect of which such determination was made shall be
deemed to be rescinded by Borrower.
(c) ILLEGALITY OR IMPRACTICABILITY OF LIBOR RATE LOAN. In the
event that on any date any Revolving Lender or Term A Lender shall have
determined (which determination shall be final and conclusive and binding upon
all parties hereto) that the making, maintaining or continuation of its LIBOR
Rate Loan (i) has become unlawful as a result of compliance by such Revolving
Lender or Term A Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Revolving Lender or Term A Lender
material hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the London interbank market or
the position of such Revolving Lender or Term A Lender in that market, then, and
in any such event, such Lender shall be an "AFFECTED LENDER" and it shall on
that day give notice (by telefacsimile or by telephone confirmed in writing) to
Borrower of such determination (which notice Agent shall promptly transmit to
each other Revolving Lender and Term A Lender). Thereafter (a) the obligation of
the Affected Lender to make Revolving Loans as, or to convert the Revolving Loan
or Term Loan A to, a LIBOR Rate Loan shall be suspended until such notice shall
be withdrawn by Agent, (b) to the extent such determination by the Affected
Lender relates to a LIBOR Rate Loan then being requested by Borrower pursuant to
a Notice of Borrowing or a Notice of Conversion/Continuation, the Affected
Lender shall make a Loan as (or convert a Loan to, as the case may be) a Base
Rate Loan, (c) the Affected Lender's obligation to maintain its outstanding
LIBOR Rate Loan (the "AFFECTED LOAN") shall be terminated at the earlier to
occur of the expiration of the Interest Period then in effect with respect to
the Affected Loan or when required by law, and (d) the Affected Loan shall
automatically convert into a Base Rate Loan on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a LIBOR Rate Loan then being requested by
Borrower pursuant to a Notice of Borrowing or a Notice of
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Conversion/Continuation, Borrower shall have the option, subject to the
provisions of SECTION 2.7(D), to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Revolving Lenders or Term A Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to the Affected
Lender of such rescission on the date on which Agent gives notice of its
determination as described above (which notice of rescission Agent shall
promptly transmit to each other Revolving Lender or Term A Lender).
(d) COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Borrower shall compensate Agent, for the benefit of itself and the
applicable Revolving Lender or Term A Lender, upon written request by Agent
(which request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by
Agent to lenders of funds borrowed by it to make or carry its LIBOR Rate Loan
and any loss, expense or liability sustained by Agent or any Revolving Lender or
Term A Lender in connection with the liquidation or re-employment of such funds)
which Agent or such Lender may sustain: (i) if for any reason (other than a
default by Agent or such Lender) a borrowing of a LIBOR Rate Loan does not occur
on a date specified therefor in a Notice of Borrowing or a telephonic request
for borrowing, or a conversion to or continuation of a LIBOR Rate Loan does not
occur on a date specified therefor in a Notice of Conversion/Continuation or a
telephonic request for conversion or continuation, (ii) if any prepayment or
other principal payment or any conversion of a LIBOR Rate Loan occurs on a date
prior to the last day of an Interest Period applicable to that Loan, (iii) if
any prepayment of its LIBOR Rate Loan is not made on any date specified in a
notice of prepayment given by Borrower, or (iv) as a consequence of any other
default by Borrower in the repayment of their LIBOR Rate Loan when required by
the terms of this Agreement.
(e) BOOKING OF LIBOR RATE LOAN. Any Revolving Lender or Term A
Lender may make, carry or transfer the LIBOR Rate Loan at, to, or for the
account of any of its branch offices or the office of an Affiliate of that
Lender, but in any such event without discharging such Lender from its
obligations to make Revolving Loans and subject to and in accordance with the
provisions this Agreement.
(f) ASSUMPTIONS CONCERNING FUNDING OF LIBOR RATE LOAN.
Calculation of all amounts payable to a Revolving Lender or Term A Lender under
this SECTION 2.7 and under SECTION 2.8(A) shall be made as though such Lender
had actually funded its LIBOR Rate Loan through the purchase of a LIBOR deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted LIBOR Rate in an amount equal to the amount of the LIBOR Rate Loan
and having a maturity comparable to the relevant Interest Period and through the
transfer of such LIBOR deposit from an offshore office of such Lender to a
domestic office of such Lender in the United States of America; provided,
however, that such Lender may fund its LIBOR Rate Loan in any manner it sees fit
and the foregoing assumptions shall be utilized only for the purposes of
calculating amounts payable under this SECTION 2.7 and under SECTION 2.8(A).
(g) LIBOR RATE LOAN AFTER DEFAULT. After the occurrence of and
during the continuation of a Default or an Event of Default, (i) Borrower may
not elect to have a Loan be made or maintained as, or converted to, a LIBOR Rate
Loan after the expiration of any Interest Period then in effect for the Loans
and (ii) subject to the provisions of SECTION 2.7(D), any Notice of Borrowing or
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Notice of Conversion/Continuation given by Borrower with respect to a requested
borrowing or conversion/continuation that has not yet occurred shall be deemed
to be rescinded by Borrower.
2.8 INCREASED COSTS, TAXES; CAPITAL ADEQUACY.
(a) COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of SECTION 2.8(B) (which shall be controlling with respect to the
matters covered thereby), in the event that any Revolving Lender or Term A
Lender shall determine (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) that any law, treaty
or governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the Closing Date, or compliance by such Revolving Lender
or Term A Lender with any guideline, request or directive issued or made after
the Closing Date by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):
(i) subjects such Revolving Lender or Term A Lender
(or its applicable lending office) to any additional Tax (other than any Tax on
the overall net income of such Lender) with respect to this Agreement or any of
its obligations hereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any
reserve (including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Revolving Lender or Term A
Lender (other than any such reserve or other requirements with respect to a
LIBOR Rate Loan that are reflected in the definition of Adjusted LIBOR Rate); or
(iii) imposes any other condition (other than with respect to a Tax matter) on
or affecting such Revolving Lender or Term A Lender (or its applicable lending
office) or its obligations hereunder or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Revolving
Lender or Term A Lender of agreeing to make, making or maintaining the Revolving
Loans or the Term Loan A hereunder or to reduce any amount received or
receivable by such Lender (or its applicable lending office) with respect
thereto; then, in any such case, Borrower shall promptly pay to such Lender,
upon receipt of the statement referred to in the next sentence, such additional
amount or amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any such increased
cost or reduction in amounts received or receivable hereunder; PROVIDED,
HOWEVER, that for purposes of this sentence, the final U.S. Treasury regulations
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that were issued October 6, 1997 and subsequently amended with respect to the
withholding of United States federal income tax (the "NEW WITHHOLDING
REGULATIONS") shall not be considered to constitute any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court of governmental authority, in each case that
becomes effective after the date hereof. Such Revolving Lender or Term A Lender
shall deliver to Borrower a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to such Lender
under this SECTION 2.8(A), which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
(b) WITHHOLDING OF TAXES. All sums payable by Borrower under
this Agreement and the other Loan Documents shall (except to the extent required
by law) be paid free and clear of, and without any deduction or withholding on
account of, any Tax (other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within the United States
of America or any political subdivision in or of the United States of America or
any other jurisdiction from or to which a payment is made by or on behalf of
Borrower or by any federation or organization of which the United States of
America or any such jurisdiction is a member at the time of payment. If Borrower
pays an additional amount pursuant to SECTION 2.8(A) or (B) with respect to
Taxes imposed on any payments made to or on behalf of Agent or any Revolving
Lender or Term A Lender (including any Lender that is an assignee or transferee
of an interest under this Agreement pursuant to SECTION 8.1) and such Lender
determines in its good faith discretion that it has actually received or
realized in connection therewith any refund of Tax, or any reduction of, or
credit against, its Tax liabilities (a "Tax Benefit"), such Lender shall pay to
Borrower an amount that such Lender shall, in its good faith discretion,
determine is equal to the net benefit, after tax, which was obtained by such
Lender as a consequence of such refund, reduction or credit; provided, however,
that (i) such Lender may determine, in its good faith discretion consistent with
the policies of such Lender, whether to seek a Tax Benefit and (ii) nothing in
this SECTION 2.8(B) shall require such Lender to disclose any confidential
information to Borrower (including its tax returns).
(c) TAX FORMS. Each Lender represents that as of the date
hereof, all payments to be made to it by Borrower pursuant to this Agreement and
the other Loan Documents will be totally exempt from the withholding of United
States federal tax. Each Lender agrees to deliver to Borrower on or prior to the
date hereof, or in the case of a Lender that is an assignee or transferee of an
interest under this Agreement pursuant to SECTION 8.1 on the date of such
assignment or transfer to such Lender, the appropriate Internal Revenue Service
forms or certificates that establish such Lender's entitlement to a complete
exemption from the withholding of United States federal tax with respect to
payments to be made pursuant to this Agreement and the other Loan Documents. In
addition, each Lender (including any Lender that is an assignee or transferee of
an interest under this Agreement pursuant to SECTION 8.1) agrees that (i) from
time to time after the date hereof, when a lapse in time or change in
circumstance renders the previous Internal Revenue Service forms or certificates
obsolete or inaccurate in any material respect, or (ii) upon Borrower's
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reasonable request after the occurrence of any other event requiring the
delivery of an Internal Revenue Service form or certificate in addition to or in
replacement of the forms or certificates previously delivered, it will deliver
to Borrower such Internal Revenue Service forms or certificates as may be
required in order to confirm or establish such Lender's entitlement to a
continued exemption from the withholding of United States federal tax with
respect to payments to be made under this Agreement and the other Loan
Documents. Notwithstanding anything to the contrary contained in SECTION 2.8(b),
but subject to SECTION 2.8(A), Borrower shall be entitled, to the extent it is
required to do so by law, to deduct or withhold income or similar Taxes imposed
by the United States (or any political subdivision or taxing authority thereof
or therein) from amounts payable hereunder for the account of any Lender
(including any Lender that is an assignee or transferee of any interest under
this Agreement pursuant to SECTION 8.1) and Borrower shall not be obligated
pursuant to SECTION 2.8(B) to gross-up payments to be made to such Lender in
respect of such Taxes to the extent that such Lender has not provided to
Borrower the appropriate Internal Revenue Service forms or certificates that
establish a complete exemption from such deduction or withholding.
(d) CAPITAL ADEQUACY ADJUSTMENT. If any Revolving Lender or
Term A Lender shall have determined that the adoption, effectiveness, phase-in
or applicability after the date hereof of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender (or its applicable lending office) with
any guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Revolving
Lender or Term A Lender as a consequence of, or with reference to, such Lender's
Loan or other obligations hereunder with respect to the Loan to a level below
that which such Revolving Lender or Term A Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Borrower from
such Revolving Lender or Term A Lender of the statement referred to in the next
sentence, Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender or such controlling corporation on an after-tax
basis for such reduction. Such Revolving Lender or Term A Lender shall deliver
to Borrower a written statement, setting forth in reasonable detail the basis of
the calculation of such additional amounts, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
2.9 GUARANTIES OF AND SECURITY FOR THE OBLIGATIONS.
(a) BORROWER AND ITS SUBSIDIARIES. (i) Subsidiary Guarantors
shall guaranty the Obligations of Borrower pursuant to the Subsidiary Guaranty
and (ii) to secure the full performance of the Obligations (a) Borrower shall
grant to Agent a duly perfected first priority Lien on all of the issued and
outstanding capital stock of Holdings, (b) Holdings shall grant to Agent a duly
perfected first priority Lien on all of the issued and outstanding capital stock
and other equity interests in the Subsidiaries (except for the Inactive
Subsidiaries) and (c) Borrower and Subsidiary Guarantors shall grant to Agent a
duly perfected first priority Lien on all real, personal and mixed Collateral of
Borrower and Subsidiary Guarantors, now owned or hereafter acquired, which Agent
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may request. Borrower and Subsidiary Guarantors shall execute and deliver any
and all Security Documents including, without limitation, the Borrower Pledge
Agreement, the Borrower Security Agreement, the Holdings Pledge Agreement,
financing statements, termination statements, collateral search reports, title
reports, title insurance, landlord waivers and consents, trademark
documentation, opinions of counsel and such other perfection documents,
instruments, information and materials with respect to the Collateral and
Pledged Collateral as Agent may reasonably request. All of the foregoing shall
be in form and substance reasonably satisfactory to Agent.
(b) FURTHER ASSURANCES; ADDITIONAL SECURITY. Borrower shall,
and shall cause each other Loan Party (whether now or hereafter acquired or
existing) to, from time to time, execute and deliver to Agent such additional
Security Documents, statements, documents, agreements and reports as it may from
time to time reasonably request to evidence, perfect or otherwise implement or
assure the security for repayment of the Obligations; PROVIDED, that no Loan
Party shall be required to provide a different type of Collateral from that
contemplated by the Security Documents to which it was a party as of September
7, 1999; PROVIDED, HOWEVER, that Borrower and each Loan Party specifically
agree, for purposes of this SECTION 2.9(B) that (i) the addition of SECTION 2.10
hereof and the implementation of a cash management system does not constitute a
different type of Collateral, and (ii) the enactment of Revised Article 9 of the
UCC and the revised types of collateral therein do not constitute a different
type of Collateral. All reinsurance policies shall include direct access
agreements reasonably acceptable to Agent.
2.10 CASH MANAGEMENT; LOCK BOXES; BLOCKED ACCOUNT AGREEMENTS. Each Loan
Party shall, and shall cause its Subsidiaries to, establish and maintain the
Cash Management Systems described below:
(a) Until the payment in full of all Obligations and the
termination of all of the Commitments hereunder, each Loan Party shall (i)
maintain lock boxes ("LOCK BOXES") or blocked accounts ("BLOCKED ACCOUNTS") at
one or more of the banks set forth in SCHEDULE 2.10, and shall request in
writing and otherwise ensure that all Account Debtors forward payment directly
to such Lock Boxes, and (ii) deposit and cause its Subsidiaries to deposit or
cause to be deposited promptly, and in any event no later than the first
Business Day after the date of receipt thereof, all cash, checks, drafts or
other similar items of payment relating to or constituting payments made in
respect of any and all Collateral (whether or not otherwise delivered to a Lock
Box) into one or more Blocked Accounts in such Loan Party's name and at a bank
identified in SCHEDULE 2.10 (each, a "RELATIONSHIP BANK"). The Borrower shall
maintain a concentration account in its name (each a "CONCENTRATION ACCOUNT" and
collectively, the "CONCENTRATION ACCOUNTS") at the bank or banks that shall be
designated as the Concentration Account bank for each such Loan Party in
SCHEDULE 2.10 (each a "CONCENTRATION ACCOUNT BANK" and collectively, the
"CONCENTRATION ACCOUNT BANKS"), which banks shall be reasonably satisfactory to
Agent.
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(b) Each Loan Party may maintain, in its name, an account
(each a "DISBURSEMENT ACCOUNT" and collectively, the "DISBURSEMENT ACCOUNTS") at
a bank reasonably acceptable to Agent into which Agent shall, from time to time,
deposit proceeds of Revolving Advances made to the Borrower pursuant to SECTION
2.1 for use by such Borrower solely in accordance with the provisions of SECTION
2.6.
(c) Each Concentration Account Bank, each bank where a
Disbursement Account is maintained and all other Relationship Banks, shall have
entered into tri-party blocked account agreements with Agent and the applicable
Loan Party thereof, as applicable, in form and substance reasonably acceptable
to Agent. Each such blocked account agreement shall provide, among other things,
that (i) all items of payment deposited in such account and proceeds thereof
deposited in the applicable Concentration Account are held by such bank as agent
or bailee-in-possession for Agent, (ii) the bank executing such agreement has no
rights of setoff or recoupment or any other claim against such account, as the
case may be, other than for payment of its service fees and other charges
directly related to the administration of such account and for returned checks
or other items of payment, and (iii) (A) with respect to banks at which a
Blocked Account is maintained, such bank agrees, from and after the receipt of a
notice (an "ACTIVATION NOTICE") from Agent on the Closing Date (the "ACTIVATION
EVENT"), to forward immediately all amounts in each Blocked Account to such
Borrower's Concentration Account Bank and to commence the process of daily
sweeps from such Blocked Account into the applicable Concentration Account and
(B) with respect to each Concentration Account Bank, such bank agrees from and
after the Closing Date, to immediately forward all amounts received in the
applicable Concentration Account to the Agent's collection account through daily
sweeps from such Concentration Account into the Agent's collection account. From
and after the Closing Date, no Loan Party shall, or shall cause or permit any
Subsidiary thereof to, accumulate or maintain cash in Disbursement Accounts or
payroll accounts as of any date of determination in excess of checks outstanding
against such accounts as of that date and amounts necessary to meet minimum
balance requirements. The Borrower and each Loan Party expressly agree that on
the Closing Date, Agent shall be entitled to issue the Activation Notice.
(d) The Loan Parties may amend SCHEDULE 2.10 to add or replace
a Relationship Bank, Lock Box or Blocked Account or to replace any Concentration
Account or any Disbursement Account; PROVIDED, that (i) Agent shall have
consented in writing in advance to the opening of such account or Lock Box with
the relevant bank and (ii) prior to the time of the opening of such account or
Lock Box, the applicable Loan Party or its Subsidiaries, as applicable, and such
bank shall have executed and delivered to Agent a tri-party blocked account
agreement, in form and substance reasonably satisfactory to Agent. The Loan
Parties shall close any of their accounts (and establish replacement accounts in
accordance with the foregoing sentence) promptly and in any event within 30 days
following notice from Agent that the creditworthiness of any bank holding an
account is no longer acceptable in Agent's reasonable judgment, or as promptly
as practicable and in any event within 60 days following notice from Agent that
the operating performance, funds transfer or availability procedures or
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performance with respect to accounts or Lock Boxes of the bank holding such
accounts or Agent's liability under any tri-party blocked account agreement with
such bank is no longer acceptable in Agent's reasonable judgment.
(e) The Lock Boxes, Blocked Accounts, Disbursement Accounts
and the Concentration Accounts shall be cash collateral accounts, with all cash,
checks and other similar items of payment in such accounts securing payment of
the Loans and all other Obligations, and in which each Loan Party thereof shall
have granted a Lien to Agent, pursuant to the Security Agreement.
(f) Borrower and the Loan Parties agree that all amounts
deposited in the Agent's collection account shall be deemed received by Agent in
accordance with SECTION 2.4(J) and shall be applied (and allocated) by Agent in
accordance with SECTION 2.4(J). In no event shall any amount be so applied
unless and until such amount shall have been good collected funds swept to the
Agent's collection account.
(g) Each Loan Party shall and shall cause its Affiliates,
officers, employees, agents, directors or other Persons acting for or in concert
with such Loan Party (each a "RELATED PERSON") to (i) hold in trust for Agent,
for the benefit of itself and Lenders, all checks, cash and other items of
payment received by such Loan Party or any such Related Person, and (ii) within
1 Business Day after receipt by such Loan Party or any such Related Person of
any checks, cash or other items of payment, deposit the same into a Blocked
Account of such Loan Party. Each Loan Party and each Related Person thereof
acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral. All proceeds of
the sale or other disposition of any Collateral, shall be deposited directly
into the applicable Blocked Accounts. The accounts set forth on SCHEDULE 2.10
(except for the Designated Account) are all of such accounts maintained by any
Loan Party as of the date hereof.
2.11 FEES. Borrower shall pay the following fees, and issue to GECC the
following warrants, in connection with this Agreement:
(a) REVOLVING LOAN COMMITMENT FEE. Borrower shall pay to Agent
for the account of each Revolving Lender with a Revolving Commitment, on a
pro-rata basis, a fee equal to $150,000, such fee to be fully earned on the
Closing Date, and payable in cash upon the earlier to occur of (x) March 31,
2002 and (y) the Stated Maturity Date.
(b) FEE WARRANTS. Concurrently with any amendment to this
Agreement increasing the aggregate funded amount of Term Loan B to $4,000,000
(the "FUNDING THRESHOLD") or, in the alternative, when the aggregate funded
amount of Term Loan B, together with any one or more equity Issuances after the
date hereof and before September 28, 2001, totals $4,000,000, Borrower shall be
entitled to cancel the Forbearance Warrant and the Amendment Warrant and issue
to GECC a single replacement warrant which may be exercised for a number of
shares up to four percent (4%) of the number of shares of Borrower's common
stock issued and outstanding as of such date, which replacement warrant shall be
exercisable by GECC at any time thereafter for $0.01 per share, subject to
adjustment as provided therein, and upon terms and conditions substantially
similar to the Forbearance Warrant and the Amendment Warrant; PROVIDED, HOWEVER,
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that if the Funding Threshold has not been met by September 28, 2001, Borrower
shall be entitled to reduce the percentage of Borrower's common stock for which
the Forbearance Warrant and the Amendment Warrant would then become exercisable,
which together totals 19.99% (the "WARRANT PERCENTAGE") of Borrowers common
stock issued and outstanding as of July 6, 2001, by an amount equal to 0.39975%
for every $100,000 of the aggregate principal amount of the funded Term Loan B
(together with any one or more other equity Issuances), which reduction shall be
calculated on September 28, 2001 but shall not result in reduction of the
Warrant Percentage below four percent (4%), by canceling the Forbearance Warrant
and the Amendment Warrant and issuing a single replacement warrant which may be
exercised for a number of shares equal to (X) the reduced amount of the Warrant
Percentage, times (Y) the number of shares of Borrower's common stock issued and
outstanding as of September 28, 2001, which replacement warrant shall be
exercisable by GECC at any time thereafter for $0.01 per share, subject to
adjustment as provided therein, and upon terms and conditions substantially
similar to the Forbearance Warrant and the Amendment Warrant.
SECTION III.
CONDITIONS TO THE LOANS
The obligations of the Lenders to make the Loans hereunder (including,
without limitation, Revolving Loans and Term Loan B) are subject to the
satisfaction of the following conditions.
3.1 CONDITIONS TO EFFECTIVENESS.
The Agreement shall become effective only upon, and the obligation of
the Lenders to make the Loans, are subject to, prior or concurrent satisfaction
of the following conditions on or before the Closing Date:
(a) LOAN DOCUMENTS. Borrower shall, and shall cause each
Subsidiary Guarantor to, duly execute and deliver to Agent the following Loan
Documents, dated as of the Closing Date:
(i) this Agreement, together with updated schedules
that are true, accurate and complete as of the Closing Date;
(ii) the Revolving Note;
(iii) the Term A Note;
(iv) the Term B Notes;
(v) the Reaffirmation Agreement;
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(vi) the Term B Note Purchase Agreement and related
documents thereto;
(vii) UCC-3 amendments requiring the applicable
debtor's signature; and
(viii) such other documents as Agent may reasonably
request.
(b) BORROWER AND SUBSIDIARY GUARANTOR DOCUMENTS. Borrower
shall, and shall cause each Subsidiary Guarantor to, deliver to Agent the
following with respect to Borrower or such Subsidiary Guarantor, as the case may
be, each, unless otherwise noted, dated as of the Closing Date:
(i) Resolutions of the board of directors of such
Person approving and authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, certified as of the Closing Date by the
corporate secretary or an assistant secretary of such Person as being in full
force and effect without modification or amendment;
(ii) Signature and incumbency certificates of the
officers of such Person executing the Loan Documents to which it is a party;
(c) SECURITY INTERESTS IN PERSONAL PROPERTY. To the extent not
previously delivered to Agent, Agent shall have received evidence satisfactory
to it that Borrower and Subsidiary Guarantors shall have taken or caused to be
taken all such actions, executed and delivered or caused to be executed and
delivered all such agreements, documents and instruments, and made or caused to
be made all such filings and recordings (other than the filing or recording of
items described in clauses (ii) and (iii) below) that may be necessary or, in
the opinion of Agent, desirable in order to create in favor of Agent a valid and
(upon such filing and recording) perfected security interest in (i) the entire
personal property Collateral of Borrower and Subsidiary Guarantors and (ii) the
Pledged Collateral.
(d) FINANCIAL STATEMENTS AND PROJECTIONS. On or before the
Closing Date, Agent shall have received satisfactory financial projections for
fiscal years 2001 and 2002 and consolidated financial statements of the Borrower
and its Subsidiaries for the 6 months ended June 30, 2001, certified as true and
correct pursuant to an Officer's Certificate of the Borrower.
(e) OFFICER'S CERTIFICATE. As of the Closing Date, (i) no
event which would constitute a Default or an Event of Default shall have
occurred and be continuing, (ii) the representations and warranties in SECTION 4
hereof shall be true, correct and complete in all material respects on and as of
the Closing Date to the same extent as though made on and as of that date,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations or warranties shall have
been true, correct and complete in all material respects as of such date, and
(iii) each Loan Party shall have delivered to Agent an Officer's Certificate to
such effect, in form and substance satisfactory to Agent.
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(f) INSURANCE CERTIFICATE. Borrower shall have delivered to
Agent a certificate of insurance pursuant to SECTION 4.17.
(g) OPINIONS OF COUNSEL. Agent and its counsel shall have
received originally executed copies of one or more favorable written opinions,
dated as of the Closing Date, of Akerman, Senterfitt & Xxxxxx, P.A. in form and
substance reasonably satisfactory to Agent and its counsel.
(h) COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Agent and its counsel shall be satisfactory in form and substance
to Agent and such counsel, and Agent and its counsel shall have received all
such counterpart originals or certified copies of such documents as Agent may
reasonably request.
(i) PAYMENT OF FEES. Borrower and the Loan Parties shall have
paid all fees in connection with this Agreement and the transactions
contemplated thereby, including fees of counsel to the Agent.
3.2 CONDITIONS SUBSEQUENT.
As a condition subsequent to the Closing Date, Borrower shall, and
shall cause each Subsidiary Guarantor to, perform the following (the failure to
so perform or cause to be performed constituting an Event of Default):
(a) INACTIVE SUBSIDIARIES. On or before August 20, 2001, Agent
shall have received evidence that all documents of dissolution with respect to
the Inactive Subsidiaries have been duly prepared and otherwise either have been
filed, or are in form ready for filing, with the appropriate governmental
authority or agency.
(b) LANDLORD CONSENT. Within ten (10) days of the Closing
Date, Borrower shall deliver to Agent a Landlord Consent for 000 Xxxx Xxxxxxx
Xxxx., Xxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx and 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxxx,
Xxx Xxxxxx;
3.3 CONDITIONS TO EFFECTIVENESS OF ALL LOANS.
The obligation of Lenders to make any Loan on any Funding Date is
subject to the following conditions precedent:
(a) Agent shall have received before such Funding Date, in
accordance with the provisions of SECTION 2.1(D), an originally executed Notice
of Borrowing, in each case signed by any executive officer of Borrower.
(b) As of such Funding Date:
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(i) The representations and warranties contained
herein and in the other Loan Documents shall be true, correct and complete on
and as of such Funding Date to the same extent as though made on and as of that
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties
shall have been true, correct and complete on and as of such earlier date;
(ii) No event shall have occurred and be continuing
or would result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute a Default or Event of Default;
(iii) Each Loan Party shall have performed all
agreements and satisfied all conditions which this Agreement provides shall be
performed or satisfied by it on or before such Funding Date;
(iv) No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on such Funding Date;
(v) The making of the Loans requested on such Funding
Date shall not violate any law including Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System; and
(vi) No injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to any action, suit
or proceeding seeking to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of Loans hereunder.
3.4 CONDITIONS TO LETTERS OF CREDIT.
On the date of incurrence of any Letter of Credit Obligations, all
conditions precedent described in SECTION 3.3(B) shall be satisfied to the same
extent as if the Obligations of such Letter of Credit Obligations were the
making of a Loan and the date of incurrence of such Letter of Credit was a
Funding Date.
SECTION IV.
BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Agent and the Lender Group to enter into this
Agreement and to make the Loans, Borrower, on behalf of itself and each other
Loan Party, as applicable, represents and warrants to Agent and the Lender Group
that, on the Closing Date the following statements are true, correct and
complete:
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4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
(a) ORGANIZATION AND POWERS. Each Loan Party is a corporation,
partnership, limited liability company or trust, as the case may be, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization as specified in SCHEDULE 4.1(D) annexed hereto.
Each Loan Party has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and the Related Documents to which
it is a party and to carry out the transactions contemplated thereby.
(b) QUALIFICATION AND GOOD STANDING. Each of Borrower and each
Subsidiary Guarantor (except for Queens Cable Contractors, Inc., a New Jersey
Corporation) is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had and will not have a Material Adverse
Effect.
(c) CONDUCT OF BUSINESS. Borrower and the Subsidiary
Guarantors are engaged only in the businesses permitted to be engaged in
pursuant to SECTION 6.13 and are conducting their business in accordance with
the provisions of SECTION 6.13. Each of Borrower and each Subsidiary Guarantor
holds all licenses, permits, franchises, certificates of authority, or any
waivers of the foregoing that are necessary to permit them to conduct their
respective businesses as now conducted and to hold and operate their respective
properties except as could not reasonably be expected to have a Material Adverse
Effect. All such licenses, permits, franchises, certificates of authority, and
waivers are valid and in full force and effect.
(d) SUBSIDIARIES. All of the Subsidiaries of Borrower as of
the date hereof are identified in SCHEDULE 4.1(D) annexed hereto. The capital
stock of each of the Subsidiaries of Borrower identified in SCHEDULE 4.1(D)
annexed hereto is duly authorized, validly issued, fully paid and nonassessable
and none of such capital stock constitutes Margin Stock. SCHEDULE 4.1(D) annexed
hereto correctly sets forth, as of the date hereof, the ownership interest of
Borrower and each of its Subsidiaries in each of the Subsidiaries of Borrower
identified therein.
(e) Intentionally Omitted.
(f) COLLATERAL MATTERS. Other than as may be supplemented by
written notices delivered to Agent pursuant to the Pledge Agreements and the
Security Agreements:
(i) the chief executive office and principal place of
business of each Loan Party is as set forth in Part One of SCHEDULE 4.1(F)
annexed hereto;
(ii) the office where each Loan Party keeps its
records concerning Accounts (as defined in the Security Agreements) and all
originals of all chattel paper which evidence any Accounts are located at the
addresses specified for such Loan Party in Part Two of SCHEDULE 4.1(F) annexed
hereto;
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(iii) the location where each Loan Party keeps any
Inventory (as defined in the Security Agreements) is set forth according to the
applicable Loan Party in Part Three of SCHEDULE 4.1(F) annexed hereto;
(iv) the location where each Loan Party keeps any
Equipment (as defined in the Security Agreements) is set forth according to the
applicable Loan Party in Part Four of SCHEDULE 4.1(F) annexed hereto;
(v) other than as set forth in Part Five of SCHEDULE
4.1(F) annexed hereto, no Loan Party does any business under any fictitious
business names or tradenames or has done business under any fictitious business
names or tradenames during past the five years.
4.2 AUTHORIZATION OF BORROWING, ETC.
(a) AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Related Documents have been duly
authorized by all necessary action on the part of each Loan Party that is a
party thereto.
(b) NO CONFLICT. The execution, delivery and performance by
Loan Parties of the Loan Documents and the Related Documents and the
consummation of the transactions contemplated thereby do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to any Loan Party, the Certificate or Articles of Incorporation or
Bylaws or other organizational documents of any Loan Party or any order,
judgment or decree of any court or other agency of government binding on any
Loan Party, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
any Loan Party, except as disclosed on SCHEDULE 4.6 hereto, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of any Loan Party (other than any Liens created under any of the Loan
Documents in favor of Agent), or (iv) require any approval of stockholders or
any approval or consent of any Person under any Contractual Obligation of any
Loan Party, except for such approvals or consents which have already been
obtained that on or before the date hereof, such consents to be obtained shall
be disclosed in writing to Agent.
(c) GOVERNMENTAL CONSENTS. The execution, delivery and
performance by Loan Parties of the Loan Documents and the Related Documents and
the consummation of the transactions contemplated thereby do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body.
(d) BINDING OBLIGATION. Each of the Loan Documents and the
Related Documents has been duly executed and delivered by each Loan Party that
is a party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
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4.3 FINANCIAL CONDITION.
Borrower has heretofore delivered to Agent, the projections and
financial statements described in SECTION 3.1(D). Except as set forth in
SCHEDULE 4.3 annexed hereto, all such statements were prepared in conformity
with GAAP and fairly present, in all material respects, the financial position
(on a consolidated and, where applicable, consolidating basis) of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated and, where
applicable, consolidating basis) of the entities described therein for each of
the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Borrower and its Subsidiaries do not (and will not following the funding of any
Loan hereunder) have any Contingent Obligation, contingent liability or
liability for Taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements or the notes thereto
and which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Borrower
or any of its Subsidiaries.
4.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Except as set forth in SCHEDULE 4.4 annexed hereto, since July 5, 2001,
no event or change has occurred that has caused or evidences, either in any case
or in the aggregate, a Material Adverse Effect. Since July 5, 2001, neither
Borrower nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so.
4.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
(a) TITLE TO PROPERTIES; LIENS. The Loan Parties have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in SECTION 4.3 or in the most recent
financial statements delivered pursuant to SECTION 5.1, in each case except for
assets disposed of since the date of such financial statements in the ordinary
course of business or as otherwise permitted under SECTION 6.8 and except as
could not reasonably be expected to have a Material Adverse Effect. Except as
permitted by this Agreement, all such properties and assets are free and clear
of Liens.
(b) REAL PROPERTY. As of the date hereof, (i) no Loan Party
owns any real property except as set forth on SCHEDULE 4.5(B)(1) and subject to
a Mortgage in favor of Agent, and (ii) SCHEDULE 4.5(B)(2) annexed hereto
contains a true, accurate and complete list of all Material Leasehold Properties
of any Loan Party, regardless of whether such Loan Party is the landlord or
tenant (whether directly or as an assignee or successor in interest) under such
lease, sublease or assignment. Except as specified in SCHEDULE 4.5(B)(2) annexed
hereto, each agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect and Borrower does not have knowledge of any
default that has occurred and is continuing thereunder, and each such agreement
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constitutes the legally valid and binding obligation of each applicable Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
4.6 LITIGATION; ADVERSE FACTS.
Except as set forth on SCHEDULE 4.6, there are no actions, suits,
proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of any Loan Party) at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign (including any
Environmental Claims) that are pending or, to the knowledge of any Loan Party,
threatened against or affecting any Loan Party or any property of any Loan Party
and that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. No Loan Party is in violation of any
applicable laws (including any Environmental Laws) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or (b) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
4.7 PAYMENT OF TAXES.
Except to the extent permitted by SECTION 5.3, all tax returns and
reports of each Loan Party required to be filed by any of them have been timely
filed, and all Taxes shown on such tax returns to be due and payable and all
assessments, fees and other governmental charges upon each Loan Party and upon
their respective properties, assets, income, businesses and franchises which are
due and payable have been paid when due and payable. No Loan Party knows of any
proposed Tax assessment against any Loan Party which is not being actively
contested by such Loan Party in good faith and by appropriate proceedings;
provided, that such reserves or other appropriate provisions, if any, as shall
be required in conformity with GAAP shall have been made or provided therefor.
4.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
(a) No Loan Party is in default in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained in
any of its Contractual Obligations, and no condition exists that, with the
giving of notice or the lapse of time or both, would constitute such a default,
except where the consequences, direct or indirect, of such default or defaults,
if any, would not have a Material Adverse Effect.
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(b) No Loan Party is a party to or is otherwise subject to any
agreements or instruments or any charter or other internal restrictions that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
(c) SCHEDULE 4.8 contains a true, correct and complete list of
all the Material Contracts in effect on the date hereof. Except as described on
SCHEDULE 4.8, all such Material Contracts are in full force and effect and no
material defaults currently exist thereunder.
4.9 GOVERNMENTAL REGULATION.
No Loan Party is subject to regulation under the Public Utility Holding
Borrower Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Borrower Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.
4.10 SECURITIES ACTIVITIES.
(a) No Loan Party is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
(b) Not more than twenty five percent (25%) of the value of
the assets (either of Borrower only or of Borrower and its Subsidiaries on a
consolidated basis) subject to the provisions of SECTIONS 6.2 or 6.8 or subject
to any restriction contained in any agreement or instrument, between Borrower
and Agent or any Affiliate of Agent, relating to Indebtedness and within the
scope of SECTION 7.2, will be Margin Stock.
4.11 EMPLOYEE BENEFIT PLANS.
(a) Each Loan Party is in compliance with all applicable
provisions and requirements of ERISA and the regulations and published
interpretations thereunder with respect to each Employee Benefit Plan, and have
performed all their obligations under each Employee Benefit Plan. Each Employee
Benefit Plan (other than a Multiemployer Plan) which is intended to qualify
under SECTION 401(A) of the Internal Revenue Code is so qualified.
(b) No ERISA Event has occurred or is reasonably expected to
occur that could reasonably be expected to have a Material Adverse Effect.
(c) Except to the extent required under SECTION 4980B of the
Internal Revenue Code, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of any Loan Party.
(d) As of the most recent valuation date for any Pension Plan,
the amount of benefit liabilities (as defined in SECTION 4001(A)(16) of ERISA
and determined using the actuarial assumptions set forth in the most recent
actuarial report pertaining to such Pension Plan), individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
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Pension Plans with respect to which assets exceed benefit liabilities), does not
exceed the fair market value of the assets of such Pension Plans by more than
$50,000.
(e) To the knowledge of Borrower, after due inquiry, the
potential liability of Borrower, its Subsidiaries and their respective ERISA
Affiliates for a complete withdrawal from each Multiemployer Plan (within the
meaning of SECTION 4203 of ERISA), when aggregated with such potential liability
for a complete withdrawal from all Multiemployer Plans, does not exceed $50,000.
4.12 CERTAIN FEES.
Except as set forth on SCHEDULE 4.12, no broker's or finder's fee or
commission will be payable with respect to this Agreement or any of the
transactions contemplated hereby, and Borrower hereby indemnifies Agent against,
and agrees that it will hold Agent harmless from. any claim, demand or liability
for any such broker's or finder's fees alleged to have been incurred in
connection herewith or therewith and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.
4.13 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving any Loan Party that could reasonably be expected to have a Material
Adverse Effect.
4.14 SOLVENCY.
No transfer of property is being made by Borrower or any other Loan
Party and no obligation is being incurred by Borrower or any other Loan Party in
connection with the transactions contemplated by this Agreement or the other
Loan Documents with the intent to hinder, delay, or defraud either present or
future creditors of Borrower or any other Loan Party, or to leave such Borrower
or other Loan Party with unreasonably small capital with which to conduct its
present or proposed business.
4.15 MATTERS RELATING TO COLLATERAL.
(a) CREATION, PERFECTION AND PRIORITY OF LIENS. The execution
and delivery of the Security Documents by Loan Parties prior to the date hereof,
together with the amendments and confirmations entered into on the date hereof,
and the UCC financing statements previously filed, naming each Loan Party as
"debtor" and GECC as "secured party" and describing the Collateral (as defined
in the Security Agreements), constitute, to the extent a security interest in
such Collateral may be perfected by filing UCC financing statements, valid and
perfected security interests therein subject to no Liens (other than Permitted
Encumbrances) and prior to all other Liens. The security interests in such
Collateral granted to Agent and constituting Intellectual Property both prior to
and after the date hereof will constitute valid first-priority security
interests therein subject to no Liens (other than Permitted Encumbrances) and
prior to all other Liens. The Pledge Agreements create in favor of Agent a valid
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perfected security interest in such Pledged Collateral as security for the
Secured Obligations (as such term is defined in the Pledge Agreements), to the
extent contemplated by the Security Documents subject to no equal or prior
security interests and prior to all other Liens. Upon the Agent's taking, or
previously having taken, possession of the certificates evidencing that portion
of the Pledged Collateral consisting of Holdings' and the Subsidiaries' stock
certificates, duly endorsed by the applicable Pledgor (as defined in the Pledge
Agreement), the security interest in such Pledged Collateral will be a
first-priority security interest, subject to no equal or prior security interest
and prior to all other Liens. As of the date hereof, any security interest
previously, contemporaneously, or hereafter granted to GECC shall be deemed
automatically, without any action by Borrower, any other Loan Party, Agent or
any member of the Lender Group, to constitute a security interest granted to
Agent for the benefit of the Lender Group hereunder. Agent may, but shall have
no obligation, to file UCC amendments in the applicable jurisdiction reflecting
the agency status of Agent to any UCC financing statement previously filed by
GECC in connection with the Original Credit Agreement or the First Amended
Credit Agreement.
(b) GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Agent pursuant to any of the
Security Documents or (ii) the exercise by Agent of any rights or remedies in
respect of any Collateral (whether specifically granted or created pursuant to
any of the Security Documents or created or provided for by applicable law),
except for filings or recordings contemplated by SECTIONS 2.9(B) and 4.15(A) and
except as may be required, in connection with the disposition of any Pledged
Collateral, by laws generally affecting the offering and sale of Securities.
(c) ABSENCE OF FILINGS. No effective UCC financing statement,
fixture filing or other instrument similar in effect covering all or any part of
the Collateral is on file in any filing or recording office.
(d) MARGIN REGULATIONS. The pledge of the Pledged Collateral
pursuant to the Security Documents does not violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
(e) INFORMATION REGARDING COLLATERAL. All information supplied
to Agent by or on behalf of any Loan Party with respect to any of the Collateral
(in each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects.
4.16 DISCLOSURE.
No representation or warranty of any Loan Party contained in any Loan
Document or Related Document or in any other document, certificate or written
statement furnished to Agent by or on behalf of such Loan Party for use in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state a material fact (known to
such Loan Party, in the case of any document not furnished by it) necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
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estimates and assumptions believed by each Loan Party to be reasonable at the
time made, it being recognized by Agent that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results. There are no facts known (or which should upon the reasonable exercise
of diligence be known) to any Loan Party (other than matters of a general
economic nature) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and that have not been disclosed
herein or in such other documents, certificates and statements furnished to
Agent for use in connection with the transactions contemplated hereby.
4.17 INSURANCE.
Each Loan Party maintains, with, to its knowledge, financially sound
and reputable insurers, insurance with respect to its properties and business
and the properties and business of its Subsidiaries, against loss or damage of
the kinds customarily insured against by corporations of established reputation
engaged in the same or similar business of such types and in such amounts as are
customarily carried under similar circumstances by such other corporations.
Attached as SCHEDULE 4.17 hereto is a complete and accurate description of all
policies of insurance that will be in effect as of the date hereof for the Loan
Parties.
4.18 INTELLECTUAL PROPERTY.
(a) The Loan Parties own, or are licensed to use, the
Intellectual Property and to the knowledge of the Loan Parties all such
Intellectual Property is duly and properly registered, filed or issued in the
appropriate office and jurisdictions for such registrations, filing or
issuances, except for common law trademarks and unregistered copyrights.
(b) No material claim has been asserted by any Person with
respect to the use of any such Intellectual Property, or challenging or
questioning the validity or effectiveness of any such Intellectual Property. To
each Loan Party's knowledge, the use of such Intellectual Property by such Loan
Party does not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liabilities on the
part of any Loan Party that are material to such Loan Party. The consummation of
the transactions contemplated by this Agreement will not impair the ownership of
(or the license to use, as the case may be) any of such Intellectual Property by
any Loan Party.
4.19 INTENTIONALLY OMITTED.
4.20 ENVIRONMENTAL PROTECTION.
Except as set forth in SCHEDULE 4.20 annexed hereto:
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(a) the operations of each Loan Party (including, without
limitation, all operations and conditions at or in the Facilities) comply in all
material respects with all Environmental Laws;
(b) each Loan Party has obtained all Governmental
Authorizations under Environmental Laws necessary to its operations, and all
such Governmental Authorizations are in good standing, and each Loan Party is in
compliance with all material terms and conditions of such Governmental
Authorizations;
(c) no Loan Party has received (i) any notice or claim to the
effect that it is or may be liable to any Person as a result of or in connection
with any Hazardous Materials or (ii) any letter or request for information under
SECTION 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ss. 9604) or comparable state laws;
(d) none of the operations of any Loan Party is subject to any
judicial or administrative proceeding alleging the violation of or liability
under any Environmental Laws which if adversely determined could reasonably be
expected to have a Material Adverse Effect;
(e) no Loan Party nor any of its Facilities or operations are
subject to any outstanding written order or agreement with any governmental
authority or private party relating to (i) any Environmental Laws or (ii) any
Environmental Claims;
(f) no Loan Party nor, to the best knowledge of each Loan
Party, any predecessor of such Loan Party or its Subsidiaries has filed any
notice under any Environmental Law indicating past or present treatment or
Release of Hazardous Materials at any Facility, and none of any Loan Party's or
any of its Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent;
(g) no Hazardous Materials exist on or under any Facility in a
manner that has a reasonably possibility of giving rise to an Environmental
Claim having a Material Adverse Effect, and no Loan Party has filed any notice
or report of a Release of any Hazardous Materials that has a reasonable
possibility of giving rise to an Environmental Claim against Borrower or any of
its Subsidiaries having a Material Adverse Effect;
(h) to the knowledge of each Loan Party, no Loan Party nor any
of its predecessors has disposed of any Hazardous Materials in a manner that has
a reasonable possibility of giving rise to an Environmental Claim having a
Material Adverse Effect;
(i) no underground storage tanks or surface impoundments are
on or at any Facility; and
(j) no Lien in favor of any Person relating to or in
connection with any Environmental Claim against Borrower or any of its
Subsidiaries has been filed or has been attached to any Facility.
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4.21 INTENTIONALLY OMITTED.
SECTION V.
BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants and agrees that until payment in full of all Loans
and other Obligations, unless Agent shall otherwise give prior written consent,
Borrower shall perform, and shall cause each other Loan Party to perform, all
covenants in this SECTION 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Borrower will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Borrower will deliver to Agent, and upon request, directly to any
Lender requesting such information at the address of such Lender for the purpose
of notices hereunder:
(a) WEEKLY BUDGETS IN COMPARATIVE FORM; "FLASH" REPORTS: on a
weekly basis, a (i) rolling thirteen (13) week cash forecast by line item for
Borrower's and the other Loan Parties' operations (all such forecasts shall be
in form and substance acceptable to Agent), together with a comparison of actual
payments and budgeted line items for the previous week, and (ii) "flash" report
in substantially the same form and containing the same reporting, as delivered
to Agent on the Closing Date.
(b) MONTHLY FINANCIALS: as soon as available and in any event
within 30 days after the end of each month, copies of the monthly cash flow
statements, balance sheets and income statements for such month of Borrower and
each Subsidiary, on a consolidated and consolidating basis, together with such
additional reports and information provided to the board of directors of
Borrower on a monthly or periodic basis;
(c) QUARTERLY FINANCIALS: as soon as available and in any
event within 45 days after the end of each of Borrower's first three Fiscal
Quarters, the consolidated balance sheet of Borrower and its Subsidiaries as at
the end of such Fiscal Quarter and the related consolidated statements of income
and cash flows of Borrower and its Subsidiaries for such Fiscal Quarter and for
the period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year, all
in reasonable detail and certified by an executive officer of Borrower that they
fairly present, in all material respects, the financial condition of Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments;
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(d) YEAR-END FINANCIALS: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (i) the consolidated balance
sheet of Borrower and its Subsidiaries as at the end of such Fiscal Year and the
related consolidated statements of income and cash flows of Borrower and its
Subsidiaries for such Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, all in reasonable detail and certified by an
executive officer of Borrower that they fairly present, in all material
respects, the financial condition of Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated and (ii) in the case of such consolidated financial
statements, a report thereon of independent certified public accountants of
recognized standing selected by Borrower and satisfactory to Agent, which report
shall be unqualified, shall express no doubts about the ability of Borrower and
its Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects, the
consolidated financial position of Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(e) OFFICER'S AND COMPLIANCE CERTIFICATES: together with each
delivery of financial statements of Borrower and its Subsidiaries pursuant to
subdivisions (a), (b) and (c) above, (i) an Officer's Certificate of Borrower
duly executed by an executive officer of Borrower stating that the signer has
reviewed the terms of this Agreement and has made, or caused to be made under
his or her supervision, a review in reasonable detail of the transactions and
condition of Borrower and its Subsidiaries during the accounting period covered
by such financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that the signer
does not have knowledge of the existence as at the date of such Officer's
Certificate, of any condition or event that constitutes an Event of Default or
Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action Borrower has taken, is
taking and proposes to take with respect thereto; and (ii) a Compliance
Certificate duly executed by an executive officer of Borrower demonstrating in
reasonable detail compliance during and at the end of the applicable accounting
periods with the restrictions contained in SECTION 6;
(f) RECONCILIATION STATEMENTS: if, as a result of any change
in accounting principles and policies from those used in the preparation of the
audited financial statements referred to in SECTION 4.3, the consolidated
financial statements of Borrower and its Subsidiaries delivered pursuant to
subdivisions (a), (b), (c) or (m) of this SECTION 5.1 will differ in any
material respect from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first delivery of
financial statements pursuant to subdivision (a), (b), (c) or (m) of this
SECTION 5.1 following such change, consolidated financial statements of Borrower
and its Subsidiaries for (y) the current Fiscal Year, (z) the two full Fiscal
Years immediately preceding the Fiscal Year in which such change is made, in
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each case prepared on a pro forma basis as if such change had been in effect
during such periods, and (b) together with each delivery of financial statements
pursuant to subdivision (a), (b), (c) or (m) of this SECTION 5.1 following such
change, a written statement of an executive officer of Borrower setting forth
the differences (including any differences that would affect any calculations
relating to the financial covenant set forth in SECTION 6.7) which would have
resulted if such financial statements had been prepared without giving effect to
such change;
(g) ACCOUNTANTS' CERTIFICATION: together with each delivery of
consolidated financial statements of Borrower and its Subsidiaries pursuant to
subdivision (c) above, a written statement by the independent certified public
accountants giving the report thereon (i) stating that their audit examination
has included a review of SECTION 6.7 of this Agreement as it relates to
accounting matters, (ii) stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of Default or
Default has come to their attention and, if such a condition or event has come
to their attention, specifying the nature and period of existence thereof;
provided, that such accountants shall not be liable by reason of any failure to
obtain knowledge of any such Event of Default or Default that would not be
disclosed in the course of their audit examination, and (iii) stating that based
on their audit examination nothing has come to their attention that causes them
to believe either or both that the information contained in the certificates
delivered therewith pursuant to subdivision (d) above is not correct or that the
matters set forth in the Compliance Certificates delivered therewith pursuant to
clause (ii) of subdivision (d) above for the applicable Fiscal Year are not
stated in accordance with the terms of this Agreement; provided, however, that
in issuing such statements, such accountants shall not be required to exceed the
scope of normal auditing procedures conducted in connection with their opinion
referred to above;
(h) SEC FILINGS AND PRESS RELEASES: promptly upon their
becoming available, copies of (i) all financial statements, reports, notices and
proxy statements sent or made available generally by Borrower to its security
holders or by any Subsidiary of Borrower to its security holders other than
Borrower or another Subsidiary of Borrower, (ii) all regular and periodic
reports and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Borrower or any of its Subsidiaries
with any securities exchange or with the Securities and Exchange Commission or
any governmental or private regulatory authority, and (iii) all press releases
and other statements made available generally by Borrower or any of its
Subsidiaries to the public concerning material developments in the business of
Borrower or any of its Subsidiaries;
(i) EVENTS OF DEFAULT, ETC.: promptly upon any officer of
Borrower obtaining knowledge (i) of any condition or event that constitutes an
Event of Default or Default, (ii) that any Person has given any notice to
Borrower or any of its Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type referred to in SECTION 7.2,
(iii) of any condition or event that would be required to be disclosed in a
current report filed by Borrower with the Securities and Exchange Commission on
Form 8-K, or (iv) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect, an
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Officer's Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken by
any such Person and the nature of such claimed Event of Default, Default,
default, event or condition, and what action Borrower has taken, is taking and
proposes to take with respect thereto;
(j) LITIGATION OR OTHER PROCEEDINGS: promptly upon any officer
of any Loan Party obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration against or
affecting any Loan Party or any property of any Loan Party (collectively,
"Proceedings") not previously disclosed in writing by Loan Parties to Agent or
(Y) any material development in any Proceeding that, in any case:
(i) if adversely determined, has a reasonable
possibility of having a Material Adverse Effect; or
(ii) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be reasonably
available to Borrower to enable Agent and its counsel to evaluate such matters;
(k) ERISA EVENTS: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action the Loan Parties or any of their
respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto;
(l) ERISA NOTICES: with reasonable promptness, copies of (i)
each Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by any Loan Party or any of their respective ERISA Affiliates with the
Internal Revenue Service with respect to each Pension Plan as Agent shall
request; (ii) all notices received by Loan Party or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event;
and (iii) copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Agent shall reasonably request;
(m) FINANCIAL PLANS: as soon as practicable and in any event
no later than 45 days after the beginning of each Fiscal Year, a consolidated
and a consolidating plan and financial forecast for such Fiscal Year, including
without limitation (a) statements of income and cash flows of Borrower and its
Subsidiaries for such Fiscal Year and (b) such other information and projections
as Agent may reasonably request;
(n) BOARD OF DIRECTORS: with reasonable promptness, written
notice of any change in the board of directors of Borrower;
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(o) MATERIAL CONTRACTS: promptly, and in any event within ten
(10) Business Days after any Material Contract of Borrower or any of its
Subsidiaries is terminated or amended in a manner that is materially adverse to
Borrower or such Subsidiary, as the case may be, or any new Material Contract is
entered into, a written statement describing such event with copies of such
material amendments or new contracts, and an explanation of any actions being
taken with respect thereto PROVIDED HOWEVER, that the entry into such Material
Contract is permitted under SECTION 6.17;
(p) UCC SEARCH REPORT: as promptly as practicable after the
date of delivery to Agent of any UCC financing statement executed by any Loan
Party pursuant to SECTION 3.1 or 2.7, copies of completed UCC searches
evidencing the proper filing, recording and indexing of such UCC financing
statement and listing all other effective financing statements that name such
Loan Party as debtor, together with copies of all such other financing
statements not previously delivered to Agent by or on behalf of Borrower or such
Loan Party;
(q) FINANCE OR ACQUISITION OPPORTUNITIES: promptly, and in any
event within two (2) Business Days from receipt thereof, provide Agent with
copies of any written offers or proposals to provide equity or debt capital to
Borrower and its Subsidiaries including, without limitation, any written offer
to acquire all or substantially all of the assets of Borrower and/or its
Subsidiaries.
(r) OTHER INFORMATION: with reasonable promptness, such other
information and data with respect to Borrower or any of its Subsidiaries as from
time to time may be reasonably requested by Agent.
5.2 EXISTENCE, ETC.
Except as permitted under SECTION 6.8, each Loan Party shall at all
times (a) preserve and keep in full force and effect its existence and all
rights and franchises material to its business and (b) comply in all material
respects with all material provisions of all franchises and licenses, material
agreements and leases to which it is a party, and shall suffer no loss or
forfeiture thereof or thereunder.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
(a) Each Loan Party will, and will cause each of its
Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty accrues thereon, and all
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided, that no such charge or claim
need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (i) such reserve or
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other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (ii) in the case of a charge or claim
which has or may become a Lien against any of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such charge or claim.
(b) No Loan Party will file or consent to the filing of any
consolidated income tax return with any Person (other than Borrower).
5.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET INSURANCE/
CONDEMNATION PROCEEDS.
(a) MAINTENANCE OF PROPERTIES. Each Loan Party will, and will
cause each of its Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of such Loan Party and its
Subsidiaries (including all Intellectual Property, except for any trademark and
trade name identified by a Loan Party in writing to Agent, that such Loan Party
has determined, in its best business judgment, to cease using because such
trademark or trade name no longer possess any material value to the business and
operations of such Loan Party) and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof.
(b) INSURANCE. Each Loan Party will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to liabilities, losses or damage in respect of the assets, properties
and businesses of such Loan Party and its Subsidiaries as may customarily be
carried or maintained under similar circumstances by corporations of established
reputation engaged in similar businesses, in each case in such amounts (giving
effect to self-insurance), with such deductibles, covering such risks and
otherwise on such terms and conditions as shall be customary for corporations
similarly situated in the industry. Without limiting the generality of the
foregoing, each Loan Party will maintain or cause to be maintained replacement
value casualty insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts, with such deductibles, and
covering such risks as are at all times satisfactory to Agent in its
commercially reasonable judgment. Each such policy of insurance shall name Agent
as additional named insured or loss payee thereunder and provide for at least 30
days' prior written notice to Agent of any material modification or cancellation
of such policy.
(c) APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) BUSINESS INTERRUPTION INSURANCE. Upon receipt by
Borrower or any of its Subsidiaries of any proceeds of business interruption
insurance, if any, constituting Net Insurance/Condemnation Proceeds, (a) so long
as no Event of Default or Default shall have occurred and be continuing,
Borrower may retain and apply such Net Insurance/Condemnation Proceeds for
working capital purposes, and (b) if an Event of Default or Default shall have
occurred and be continuing, Borrower shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans.
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(ii) CASUALTY INSURANCE/CONDEMNATION PROCEEDS. Upon
receipt by any Borrower or any of its Subsidiaries of any Net Insurance/
Condemnation Proceeds other than from business interruption insurance, (a) so
long as no Event of Default or Default shall have occurred and be continuing and
such proceeds are less than $1,000,000 in the aggregate, Borrower shall, or
shall cause one or more of its Subsidiaries to, promptly and diligently apply
such Net Insurance/ Condemnation Proceeds to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or, to the extent not so applied
within 180 days of such receipt, to prepay Term Loan A, and (b) if (y) an Event
of Default or Default shall have occurred and be continuing or (z) such proceeds
are in an aggregate amount of $1,000,000 or more, Borrower shall apply an amount
equal to such Net Insurance/Condemnation Proceeds to prepay Term Loan A and,
upon payment in full of Term Loan A, all other Obligations then outstanding.
(iii) NET INSURANCE/CONDEMNATION PROCEEDS RECEIVED BY
AGENT. Upon receipt by Agent of any Net Insurance/Condemnation Proceeds as loss
payee at a time that Borrower would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them directly) to prepay
Term Loan A (and if an Event of Default is continuing, all other Obligations),
Agent shall, and Borrower hereby authorizes Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay Term Loan A (and if an Event of
Default is continuing, all other Obligations) and if Borrower would not be
required to so apply such proceeds at such time then Agent shall distribute such
proceeds to Borrower to apply as set forth in SECTIONS 5.4(C)(I) or (II), as
applicable.
5.5 INSPECTION RIGHTS; AGENT MEETING.
(a) INSPECTION RIGHTS. Borrower shall, and shall cause each of
its Subsidiaries to, permit any authorized representatives designated by Agent
to visit and inspect any of the properties of Borrower or any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers, independent public accountants,
consultants and financial advisors (provided, that Borrower may, if it so
chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may reasonably be requested.
(b) AGENT MEETING. Borrower will, upon the request of Agent,
participate in a meeting with Agent and Lenders once during each Fiscal Year to
be held at Borrower's corporate offices (or at such other location as may be
agreed to by Borrower and Agent) at such time as may be agreed to by Borrower,
Lenders, and Agent.
5.6 COMPLIANCE WITH LAWS, ETC.
(a) COMPLIANCE GENERALLY. Borrower shall comply, and shall
cause each of its Subsidiaries to comply with the requirements of, all
applicable laws, rules, regulations and orders of any governmental authority,
noncompliance with which could reasonably be expected to cause, individually or
in the aggregate, a Material Adverse Effect.
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(b) ENVIRONMENTAL LAWS. Borrower shall, and shall cause its
Subsidiaries to, exercise all reasonable due diligence in order to comply and
cause (i) all tenants under any leases or occupancy agreements affecting any
portion of the Facilities and (ii) all other Persons on or occupying such
property, to comply with all Environmental Laws.
5.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
(a) ENVIRONMENTAL REVIEW AND INVESTIGATION. Borrower agrees
that Agent may, at any time that Agent determines in its reasonable discretion
that any violation of Environmental Laws or risk of any Environmental Claim may
exist, (i) retain, at Borrower's expense, an independent professional consultant
to review any environmental audits, investigations, analyses and reports
relating to Hazardous Materials prepared by or for Borrower or any of its
Subsidiaries and (ii) conduct its own investigation of any Facility; provided,
that, in the case of any Facility no longer owned, leased, operated or used by
Borrower or any of its Subsidiaries. Borrower shall only be obligated to use its
best efforts to obtain permission for Agent's professional consultant to conduct
an investigation of such Facility. For purposes of conducting such a review
and/or investigation, Borrower hereby grants to Agent and its agents, employees,
consultants and contractors the right to enter into or onto any Facilities
currently owned, leased. operated or used by Borrower or any of its Subsidiaries
and to perform such tests on such property (including taking samples of soil,
groundwater and suspected asbestos-containing materials) as are reasonably
necessary in connection therewith. Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by Borrower and Agent, during normal
business hours and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at such Facility or to cause any
damage or loss to any property at such Facility. Borrower and Agent hereby
acknowledge and agree that any report of any investigation conducted at the
request of Agent pursuant to this SECTION 5.7(A) will be obtained and shall be
used by Agent for the purposes of Agent's internal credit decisions, to monitor
and police the Loans and to protect Agent's security interests created by the
Loan Documents. Agent agrees to deliver a copy of any such report to Borrower
with the understanding that Borrower acknowledges and agrees that (x) it will
indemnify and hold harmless Agent from any costs, losses or liabilities relating
to Borrower's use of or reliance on such report, (y) Agent makes no
representation or warranty with respect to such report, and (z) by delivering
such report to Borrower, Agent is not requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
(b) ENVIRONMENTAL DISCLOSURE. Borrower will deliver to Agent
and each Lender:
(i) ENVIRONMENTAL AUDITS AND REPORTS. As soon as
practicable following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether prepared
by personnel of Borrower or any of its Subsidiaries or by independent
consultants, governmental authorities or any other Persons, with respect to
significant environmental matters at any Facility which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
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or with respect to any Environmental Claims which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;
(ii) NOTICE OF CERTAIN RELEASES, REMEDIAL ACTIONS,
ETC. Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any federal, state
or local governmental or regulatory agency under any applicable Environmental
Laws, (b) any remedial action taken by Borrower or any other Person in response
to (1) any Hazardous Materials Activities the existence of which has a
reasonable possibility of resulting in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (2) any
Environmental Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect.
(iii) WRITTEN COMMUNICATIONS REGARDING ENVIRONMENTAL
CLAIMS, RELEASES, ETC. As soon as practicable following the sending or receipt
thereof by Borrower or any of its Subsidiaries, a copy of any and all written
communications with respect to (a) any Environmental Claims that, individually
or in the aggregate, have a reasonable possibility of giving rise to a Material
Adverse Effect, (b) any Release required to be reported to any federal, state or
local governmental or regulatory agency, and (c) any request for information
from any governmental agency that suggests such agency is investigating whether
Borrower or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity.
(iv) NOTICE OF CERTAIN PROPOSED ACTIONS HAVING
ENVIRONMENTAL IMPACT. Prompt written notice describing in reasonable detail (a)
any proposed acquisition of stock, assets, or property by Borrower or any of its
Subsidiaries that could reasonably be expected to (1) expose Borrower or any of
its Subsidiaries to, or result in, Environmental Claims that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or
(2) affect the ability of Borrower or any of its Subsidiaries to maintain in
full force and effect all material Governmental Authorizations required under
any Environmental Laws for their respective operations and (b) any proposed
action to be taken by Borrower or any of its Subsidiaries to commence
manufacturing or other industrial operations or to modify current operations in
a manner that could reasonably be expected to subject Borrower or any of its
Subsidiaries to any material additional obligations or requirements under any
Environmental Laws that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(v) OTHER INFORMATION. With reasonable promptness,
such other documents and information as from time to time may be reasonably
requested by Agent in relation to any matters disclosed pursuant to this SECTION
5.7.
(c) BORROWER'S ACTIONS REGARDING HAZARDOUS MATERIALS
ACTIVITIES, ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS. Borrower
or any of its Subsidiaries shall promptly take, and shall cause each of its
Subsidiaries promptly to take:
(i) REMEDIAL ACTIONS RELATING TO HAZARDOUS MATERIALS
ACTIVITIES. Any and all investigations, studies, sampling, testing, abatement,
cleanup, removal, remediation or other response actions required by
Environmental Laws to be undertaken by Borrower to remove, remediate, clean up
or xxxxx any Hazardous Materials Activity on or under any Facility that is in
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violation of any Environmental Laws or that presents a material risk of giving
rise to any Environmental Claim against Borrower or any of its Subsidiaries. In
the event Borrower or any of its Subsidiaries undertakes any such action,
Borrower or such Subsidiaries shall conduct and complete such action in
compliance with all applicable Environmental Laws and in accordance with the
orders and directives of all federal, state and local governmental authorities
except when, and only to the extent that, Borrower or such Subsidiary's
liability with respect to such Hazardous Materials Activity is being contested
in good faith by Borrower or. such Subsidiary; and
(ii) ACTIONS WITH RESPECT TO ENVIRONMENTAL CLAIMS AND
VIOLATIONS OF ENVIRONMENTAL LAWS. Any and all actions necessary to (i) cure any
material violation of applicable Environmental Laws by such Loan Party that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and (ii) make an appropriate response to any
Environmental Claim against Borrower or any of its Subsidiaries and discharge
any obligations it may have to any Person thereunder where failure to do so
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
5.8 COMPLIANCE WITH RELATED DOCUMENTS.
Each Loan Party shall comply at all times with each of the covenants
under the Related Documents to which such Loan Party is a party. Material
waivers from compliance by such Loan Party or any other Person with the
obligations specified in such Related Documents shall not be effective as
waivers hereunder unless consented to in writing by Agent.
5.9 ADDITIONAL REAL PROPERTY COLLATERAL.
Upon the request of Agent or Required Lenders, at any time, Borrower
and its Subsidiaries shall take all action necessary or reasonably advisable
such that Agent shall receive a Lien on all real property interests of Borrower
and its Subsidiaries not set forth on SCHEDULE 4.1(E) hereto or acquired after
the Closing Date, including, without limitation, all leasehold interests, and
other documents and instruments as requested by Agent at the time of acquisition
of such property.
5.10 DISSOLUTION OF INACTIVE SUBSIDIARIES.
Borrower shall have performed its obligations pursuant to SECTION 3.2
hereof, and use its best efforts to timely dissolve its Inactive Subsidiaries,
and prior to such date of dissolution, Borrower shall not have permitted any
Inactive Subsidiary to own or acquire any assets or incur any liabilities.
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5.11 CHIEF RESTRUCTURING OFFICER.
Borrower agrees to engage the Chief Restructuring Officer with such
duties, responsibilities and job description, for a period of time, and for such
fee as may be mutually acceptable to Borrower and Agent. Upon engagement of such
Chief Restructuring Officer, such Person shall not be discharged without the
prior written consent of Agent. Borrower agrees to cooperate fully, and cause
its officers, employees, accountants, consultants and other agents to cooperate
fully, in furnishing information as and when reasonably requested by Agent or
Chief Restructuring Officer regarding the Collateral and the affairs, finances,
financial condition and business operations of the Loan Parties. Borrower
authorizes Agent and Chief Restructuring Officer to meet and/or have discussions
with any of Borrower's or any Loan Party's officers, employees, accountants,
consultants and other agents from time to time to discuss any matters regarding
the Collateral and the affairs, finances, financial condition and business
operations of the Loan Parties, and shall direct and authorize all such persons
and entities to fully disclose to Agent and Chief Restructuring Officer all
information reasonably requested by Agent or Chief Restructuring Officer
regarding such Collateral and finances, financial conditions and business
operations of the Loan Parties. Borrower waives and releases any such officer,
employee, accountant, consultant or other agent from the operation and
provisions of any confidentiality agreement with Borrower or any Loan Party to
which such agent is a party so that such agent is not prohibited from providing
information to Agent or Chief Restructuring Officer. Borrower and the other Loan
Parties shall promptly, when and as requested by Agent or Chief Restructuring
Officer, provide Agent and Chief Restructuring Officer with access to the
original books and records of any Loan Party and permit Agent and Chief
Restructuring Officer to make copies thereof.
SECTION VI.
BORROWER'S NEGATIVE COVENANTS
Borrower covenants and agrees that until payment in full of the Loans
and other Obligations, unless Agent shall otherwise give prior written consent,
Borrower shall perform, and Borrower shall cause each of its Subsidiaries to
perform, all covenants in this SECTION 6.
6.1 INDEBTEDNESS.
Borrower shall not, and Borrower shall not suffer or permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Borrower and its Subsidiaries may become and
remain liable with respect to the Obligations;
(ii) Borrower and its Subsidiaries may become and
remain liable with respect to Contingent Obligations permitted by SECTION 6.5
and, upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
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(iii) Borrower and its Subsidiaries may become and
remain liable with respect to Indebtedness in respect of Capital Leases not to
exceed, at any one time, $100,000 over the life of such Capital Lease;
(iv) Borrower may become and remain liable with
respect to Indebtedness payable to any of its wholly-owned Subsidiaries, and any
wholly-owned Subsidiary of Borrower may become and remain liable with respect to
Indebtedness to Borrower or any other wholly-owned Subsidiary of Borrower;
provided, that (a) all such intercompany Indebtedness shall be evidenced by
promissory notes, (b) all such intercompany Indebtedness owed by Borrower to any
of its Subsidiaries shall be subordinated (I) in right of payment to the payment
of any payments currently or past due constituting Obligations and (II) upon the
occurrence of a Default or Event of Default, in right of payment to the payment
in full of the Obligations pursuant to the terms of the applicable promissory
notes or an intercompany subordination agreement, and (c) any payment by any
Subsidiary of Borrower under any guaranty of the Obligations shall result in a
pro tanto reduction of the amount of any intercompany Indebtedness owed by such
Subsidiary to Borrower or to any of its Subsidiaries for whose benefit such
payment is made;
(v) So long as no Default or Event of Default is
continuing at the date of incurrence thereof, Borrower and its Subsidiaries may
become and remain liable with respect to secured purchase money Indebtedness in
an aggregate amount not to exceed $100,000 at any time outstanding; provided,
that such Indebtedness shall be secured only by the assets purchased with the
proceeds thereof and at least 80% of the purchase price of such assets shall be
provided by the proceeds thereof;
(vi) [Intentionally Omitted];
(vii) Borrower may remain liable with respect to the
Seller Notes;
(viii) [Intentionally Omitted];
(ix) [Intentionally Omitted];
(x) Any Subsidiary of Borrower may become and remain
liable with respect to other Indebtedness in an aggregate principal amount not
to exceed $100,000 at any time outstanding.
6.2 LIENS AND RELATED MATTERS.
(a) PROHIBITION ON LIENS. Borrower shall not, and Borrower
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Borrower or any of its Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit the
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filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Security
Documents;
(iii) Purchase money Liens securing purchase money
Indebtedness permitted pursuant to SECTION 6.1(V); provided, that such Liens
encumber only the assets so purchased;
(iv) [Intentionally Omitted]; and
(v) the Liens described on SCHEDULE 6.2.
(b) EQUITABLE LIEN IN FAVOR OF AGENT. If Borrower or any of
Borrower's Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of SECTION 6.2(A), it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided, that, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Agent to the
creation or assumption of any such Lien not permitted by the provisions of
SECTION 6.2(A).
(c) NO FURTHER NEGATIVE PLEDGES. Except with respect to
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to an Asset Sale, neither
Borrower nor any of Borrower's Subsidiaries shall enter into any agreement
(other than an agreement prohibiting only the creation of Liens securing
Subordinated Indebtedness) prohibiting the creation or assumption of any Lien
upon any of its properties or assets, whether now owned or hereafter acquired.
6.3 DIVIDENDS; SELLER NOTES.
Borrower will not, and Borrower will not permit any of its Subsidiaries
to (i) pay dividends or make any other distributions on any of Borrower's or any
Subsidiary's capital stock, (ii) repay or prepay any Indebtedness owed by
Borrower to any member of the Investor Group or any other shareholder or
investor in Borrower, (iii) repay or prepay any Indebtedness with respect to the
Seller Notes or any other Indebtedness owed by Borrower or any Subsidiary to any
shareholder or investor in Borrower or such Subsidiary, (iv) make loans or
advances to any member of the Investor Group or any other shareholder or
investor in Borrower, (v) make loans or advances to any shareholder or investor
in a Subsidiary, (vi) transfer any of its property or assets to any member of
the Investor Group or any other shareholder or investor in Borrower; or (vii)
transfer any of its property or assets to any shareholder or investor in such
Subsidiary; provided, that, each Subsidiary of Borrower may pay dividends or
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make any other distributions or payments to any Loan Party in order to satisfy
any obligations under a tax sharing agreement in form and substance satisfactory
to Agent; and provided, further, any Subsidiary may (and shall) take any one or
more of the above-described actions if expressly permitted under this Agreement
or if the purpose of such action is to enable Borrower to fulfill its
obligations under this Agreement; and provided, further, any Subsidiary may take
the actions described in SECTION (I) hereof if and only if such payment or
distribution ultimately is paid to either Holdings or Borrower.
6.4 INVESTMENTS; JOINT VENTURES.
Borrower shall not, and Borrower shall not permit any of Borrower's
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture or make Consolidated Capital Expenditures,
except, so long as no Event of Default is continuing:
(i) Borrower and Borrower's Subsidiaries may make and
own Investments in Cash and Cash Equivalents;
(ii) Borrower and its Subsidiaries may make
intercompany loans to the extent permitted under SECTION 6.1(IV);
(iii) Borrower and its Subsidiaries may make
Consolidated Capital Expenditures not to exceed $2,000,000 in the aggregate,
provided that for the period from the date hereof through December 31, 2001 and
for each Fiscal Year thereafter, any Consolidated Capital Expenditures in an
amount greater than $200,000 shall be financed solely with the net proceeds of
any equity raised by the Borrower during such period or Fiscal Year, as the case
may be.
(iv) Intentionally Omitted.
6.5 CONTINGENT OBLIGATIONS.
Borrower shall not, and Borrower shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Subsidiaries of Borrower may become and remain
liable with respect to Contingent Obligations in respect of the Loan Documents;
(ii) Borrower and its Subsidiaries may become and
remain liable with respect to other Contingent Obligations; provided, that the
maximum aggregate liability, contingent or otherwise, of Borrower and its
Subsidiaries in respect of all such Contingent Obligations shall at no time
exceed $100,000 in the aggregate; and
(iii) Contingent Obligations with respect to
transactions permitted pursuant to SECTION 6.8.
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6.6 RESTRICTED JUNIOR PAYMENTS.
Borrower shall not, and Borrower shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment.
6.7 FINANCIAL COVENANT.
(a) TOTAL LEVERAGE RATIO. The Total Leverage Ratio for each
day during the fiscal periods set forth below shall not exceed:
PERIOD RATIO
------ -----
as of March 31, 2002 9.25
as of June 30, 2002 5.25
as of September 30, 2002 5.25
as of December 31, 2002 3.50
March 31, 2003 and thereafter 3.50
(b) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio for the Fiscal Quarters set forth below shall not be less than:
PERIOD RATIO
------ -----
as of March 31, 2002 1.00
as of each Fiscal Quarter thereafter 1.50
(c) SENIOR LEVERAGE RATIO. The Senior Leverage Ratio for each
day during the fiscal periods set forth below shall not exceed:
PERIOD RATIO
------ -----
as of March 31, 2002 6.00
as of June 30, 2002 3.50
as of September 30, 2002 3.50
as of December 31, 2002 3.00
March 31, 2003 and thereafter 2.50
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(d) EBITDA. EBITDA for each fiscal monthly period (as reported
by the Borrower pursuant to SECTION 5.1(B) hereof) shall not be less than the
respective amounts set forth below opposite such period:
FISCAL MONTHLY PERIOD AMOUNT
--------------------- ------
June, 2001 $(50,000)
July, 2001 $332,000
August, 2001 $454,000
September, 2001 $841,000
October, 2001 $643,000
November, 2001 $721,000
December, 2001 $876,000
(e) CASH REVENUES. Cash Revenues of the Borrower and its
Subsidiaries for each of the fiscal monthly periods set forth below shall not be
less than the respective amounts set forth below opposite such periods.
FISCAL MONTHLY PERIOD AMOUNT
--------------------- ------
June, 2001 $14,231,800
July, 2001 $11,100,000
August, 2001 $11,100,000
September, 2001 $14,400,000
October, 2001 $12,300,000
November, 2001 $12,700,000
December, 2001 $14,900,000
6.8 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Borrower or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
(except with respect to Inactive Subsidiaries) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
sub-lease, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or fixed assets, whether
now owned or hereafter acquired (other than sales including the sale, transfer,
replacement or other disposition of equipment and inventory, leases or
sub-leases of its property, in each case, in the ordinary course of business),
or acquire by purchase or otherwise all or substantially all the business,
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person or any division or line of business of any Person, or acquire or
create any additional Subsidiary; provided, the foregoing shall not restrict (a)
the Loan Parties from making Capital Expenditures otherwise permitted under
SECTION 6.4, and (b) so long as no Event of Default is continuing, any Asset
Sale, so long as the Net Cash Proceeds thereof are applied in the manner
required by this Agreement.
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6.9 SALES AND LEASE-BACKS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (a) which Borrower or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Borrower
or any of its Subsidiaries) or (b) which Borrower or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Borrower or any of its Subsidiaries
to any Person (other than Borrower or any of its Subsidiaries) in connection
with such lease.
6.10 SALE OR DISCOUNT OF RECEIVABLES.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
6.11 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Borrower or with any Affiliate of Borrower or of any such holder, on terms that
are less favorable to Borrower or such Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; provided, that the foregoing restriction shall not apply to any
transaction between Borrower and any of its wholly-owned Subsidiaries, by and
among any of its wholly-owned Subsidiaries, the transactions contemplated by the
Seller Notes, any transaction related to the Term Loan B, or the Term B
Warrants, or to the GECC Warrants; provided, further, that no Management Fees
shall be permitted.
6.12 DISPOSAL OF SUBSIDIARY STOCK.
Neither Borrower nor any Subsidiary shall, or suffer of permit any
other Person to directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity Securities of
any of its Subsidiaries, except to qualify directors if required by applicable
law, and to Agent.
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6.13 CONDUCT OF BUSINESS.
Borrower shall not and shall not permit any of its Subsidiaries to,
engage in any business other than to own, actively manage or operate any
business other than the business of providing communication services on an
outsourced basis and related activities.
6.14 AMENDMENTS OF WAIVERS OF RELATED DOCUMENTS AND CHARTER DOCUMENTS.
(a) NO AMENDMENT OR WAIVER OF RELATED DOCUMENTS. No Loan Party
will agree to any amendment to, or waive any of its rights under, any of the
Related Documents (other than nonmaterial amendments or waivers which
individually, or together with all other amendments, waivers or changes made,
would not be adverse to any Loan Party or Agent), without obtaining the written
consent of Agent to such amendment or waiver.
(b) CHARTER DOCUMENTS. Borrower will not, and shall not permit
any of its Subsidiaries to agree to any material amendment to, or waive any of
its material rights under, its certificates or articles of incorporation, bylaws
or other documents relating to its capital stock without, in each case,
obtaining the written consent of Agent to such amendment or waiver.
(c) AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED
INDEBTEDNESS. Borrower shall not, and shall not permit any of its Subsidiaries
to, amend or otherwise change the terms of any Subordinated Indebtedness, or
make any payment consistent with an amendment thereof or change thereto, if the
effect of such amendment or change is to change (to earlier dates) any dates
upon which payments of principal or interest are due thereon, change any event
of default or condition to an event of default with respect thereto (other than
to eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions of such Subordinated Indebtedness (or of any
guaranty thereof), or change any collateral therefor (other than to release such
collateral), or if the effect of such, amendment or change, together with all
other amendments or changes made, is to increase materially the obligations of
the obligor thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Borrower, Agent or any member of the Lender Group.
6.15 FISCAL YEAR.
Borrower shall not change its Fiscal Year-end from the Saturday
immediately preceding December 31 each calendar year without the consent of
Agent.
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6.16 PAYMENTS ON ACCOUNT OF SUBORDINATED INDEBTEDNESS.
Notwithstanding anything herein to the contrary, Borrower shall not at
any time make any payment on account of any principal, interest, fees or other
charges accrued on any Subordinated Indebtedness.
6.17 MATERIAL CONTRACTS.
Borrower and its Subsidiaries shall not enter into any Material
Contract with liability to such Borrower or Subsidiary in excess of $100,000, on
an annual basis, including, without limitation, employment agreements, without
first obtaining the prior written consent of Agent.
SECTION VII.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Borrower to pay any installment of principal of the Loans
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; or failure by Borrower to pay
any interest on the Loans or any fee or any other amount due under this
Agreement within two Business Days after the date due; or
7.2 DEFAULT IN OTHER AGREEMENTS.
Either (a) the failure of Borrower or any of Borrower's Subsidiaries to
pay when due (including any applicable grace period) any principal of or
interest on any Indebtedness (other than Indebtedness referred to in SECTION
7.1) or Contingent Obligations in an individual principal amount of $150,000 or
more or with an aggregate principal amount of $300,000 or more, in each case
beyond the end of any grace period provided therefor; or (b) the breach or
default by Borrower or any of Borrower's Subsidiaries with respect to any
material term of one or more items of Indebtedness or Contingent Obligations in
the individual or aggregate principal amounts of $300,000 or more or (c) the
breach or default by Borrower or any of Borrower's Subsidiaries with respect to
any loan agreement, mortgage, indenture or other agreement relating to such
items of Indebtedness or Contingent Obligations, if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligations (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligations to become or be declared due
and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); PROVIDED, HOWEVER, that for the
purposes of clauses (a), (b) and (c) above, failure to pay any amount under the
Seller Notes or any breach or default of any Seller Note during the period of
time that such Seller Note is Subordinated Indebtedness shall not constitute a
failure to pay when due or a breach or default under such Seller Notes; or
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7.3 BREACH OF CERTAIN COVENANTS.
Failure of Borrower to perform or comply with any term or condition
contained in SECTIONS 2.6 or 5.2 or SECTION 6 of this Agreement; or
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Borrower or any of Borrower's Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Borrower or any of Borrower's
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Borrower or any of Borrower's Subsidiaries shall default in the
performance of or compliance with any term contained in this Agreement or any of
the other Loan Documents (except for the provisions of the Term B Note Purchase
Agreement with respect to the number of members and composition of the
Borrower's board of directors), and such default shall not have been remedied or
waived within 30 days after the earlier of (a) an officer of Borrower becoming
aware of such default or (b) receipt by Borrower any of notice from Agent of
such default; or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Borrower or any of Borrower's Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or an involuntary case shall be commenced
against Borrower or any of Borrower's Subsidiaries under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over trustee, Borrower or any
of Borrower's Subsidiaries, or over all or a substantial part of its property,
shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of trustee,
Borrower or any of Borrower's Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Borrower or any of
Borrower's Subsidiaries, and any such event described in this clause shall
continue for 60 days unless dismissed, bonded or discharged; or
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7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(a) Borrower or any of Borrower's Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Borrower or any of Borrower's Subsidiaries
shall make any assignment for the benefit of creditors; or (b) Borrower or any
of Borrower's Subsidiaries shall be unable, or shall fail generally, or shall
admit in writing its inability, to pay its debts as such debts become due; or
the board of directors of Borrower or any of its Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to in clause (a) above or this clause (b); or
7.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving (a) in any individual case an amount in excess of $150,000 or (b) in
the aggregate at any time an amount in excess of $300,000 (in either case not
adequately covered by insurance as to which a solvent and unaffiliated insurance
provider of Borrower or any of its Subsidiaries has acknowledged coverage) shall
be entered or filed against Borrower or any of Borrower's Subsidiaries or any of
their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than five days prior to
the date of any proposed sale thereunder); or
7.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Borrower or any
of its Subsidiaries (other than any Inactive Subsidiary) decreeing the
dissolution or split up of Borrower or any of its Subsidiaries (other than any
Inactive Subsidiary) and such order shall remain undischarged or unstayed for a
period in excess of 30 days; or
7.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in
excess of $150,000 during the term of this Agreement; or there shall exist an
amount of benefit liabilities (as defined in SECTION 4001(A)(16) of ERISA and
determined using the actuarial assumptions set forth in the most recent
actuarial reports pertaining to such Pension Plan), individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities), which
exceeds the fair market value of the assets of such Pension Plans by more than
$150,000; or
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7.11 CHANGE IN CONTROL.
There shall occur any Change of Control; or
7.12 FAILURE OF SECURITY OR GUARANTY.
The Subsidiary Guaranty or any Security Document shall, at any time,
cease to be in full force and effect (other than by reason of a release of
Collateral in accordance with the terms thereof or the satisfaction in full of
all Obligations) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any party thereto, or Agent shall
not have or cease to have a valid and perfected security interest in the
Collateral (subject to Permitted Liens) to the extent contemplated by the
Security Documents;
7.13 TENURE OF CHIEF RESTRUCTURING OFFICER.
Borrower shall discharge the Chief Restructuring Officer without the
consent of Agent, which consent will not be unreasonably withheld, provided
however, concurrently with such discharge, Borrower shall engage a replacement
Chief Restructuring Officer satisfactory to Agent with the responsibilities set
forth hereunder; or
7.14 PAYMENTS ON SUBORDINATED INDEBTEDNESS.
Borrower shall make any payments of principal, interest or fees on any
Subordinated Indebtedness.
7.15 PAYMENT OF RESTRUCTURING AND CONSULTING FEES.
Borrower shall fail to pay any consulting or restructuring fees due to
the Chief Restructuring Officer or Ernst & Young within fifteen (15) days of the
same becoming due and payable by the Borrower.
7.16 FAILURE TO MEET PAYROLL.
Borrower shall fail to meet payroll obligations for itself and its
Subsidiaries.
THEN, (a) upon the occurrence of any Event of Default described in
SECTION 7.6 or 7.7, each of (i) the unpaid principal amount of and accrued
interest on the Loans, and (ii) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Borrower
and (b) upon the occurrence and during the continuation of any other Event of
Default, Agent may by written notice to Borrower, declare all or any portion of
the amounts described herein to be, and the same shall forthwith become,
immediately due and payable.
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SECTION VIII.
AGENT
8.1 APPOINTMENT.
(a) APPOINTMENT OF AGENT. Agent is hereby appointed Agent
hereunder and under the other Loan Documents and each member of the Lender Group
hereby authorizes Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. Agent agrees to act upon the express
conditions contained in this Agreement, and the other Loan Documents, as
applicable. The provisions of this SECTION 8 are solely for the benefit of Agent
and the members of the Lender Group, and Borrower and its Subsidiaries shall
have no rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties under this Agreement, Agent shall act solely
as an agent for the members of the Lender Group and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of agency
or trust with or for Borrower or any of its Subsidiaries.
(b) APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case Agent deems that by reason
of any present or future law of any jurisdiction it may not exercise any of the
rights, powers or remedies granted herein or in any of the other Loan Documents
or take any other action which may be desirable or necessary in connection
therewith, it may be necessary that Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "SUPPLEMENTAL COLLATERAL AGENT" and collectively as
"SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Agent appoints a Supplemental Collateral Agent with
respect to any Collateral, (i) each and every right, power, privilege or duty
expressed or intended by this Agreement or any of the other Loan Documents to be
exercised by or vested in or conveyed to Agent with respect to such Collateral
shall be exercisable by and vest in such Supplemental Collateral Agent to the
extent, and only to the extent, necessary to enable such Supplemental Collateral
Agent to exercise such rights, powers and privileges with respect to such
Collateral and to perform such duties with respect to such Collateral, and every
covenant and obligation contained in the Loan Documents and necessary to the
exercise or performance thereof by such Supplemental Collateral Agent shall run
to and be enforceable by either Agent or such Supplemental Collateral Agent, and
(ii) the provisions of this SECTION 8 and of SECTIONS 9.2 and 9.3 that refer to
Agent shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Agent shall be deemed to be references to Agent and/or
such Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from Borrower or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Agent for more
fully and certainly vesting in and confirming to him or it such rights, powers,
privileges and duties, Borrower shall, or shall cause such Loan Party to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by Agent. In case any Supplemental Collateral Agent, or a successor
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thereto, shall die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Collateral Agent, to
the extent permitted by law, shall vest in and be exercised by Agent until the
appointment of a new Supplemental Collateral Agent.
8.2 POWERS AND DUTIES; GENERAL IMMUNITY.
(a) POWERS; DUTIES SPECIFIED. Each member of the Lender Group
irrevocably authorizes Agent to take such action on such Lender's behalf and to
exercise such powers, rights and remedies hereunder and under the other Loan
Documents as are specifically delegated or granted to Agent by the terms hereof
and thereof, together with such powers, rights and remedies as are incidental
thereto. Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Agent may
exercise such powers, rights and remedies and perform such duties by or through
its agents or employees. Agent shall not have, by reason of this Agreement or
any of the other Loan Documents, a fiduciary relationship in respect of any
member of the Lender Group; and nothing in this Agreement or any of the other
Loan Documents, expressed or implied, is intended to or shall be so construed as
to impose upon Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
(b) NO RESPONSIBILITY FOR CERTAIN MATTERS. Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Agent to Lenders or by or on behalf of
Borrower to Agent or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of Borrower or any other Person liable for the payment of any
Obligations, nor shall Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary notwithstanding, Agent
shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.
(c) EXCULPATORY PROVISIONS. None of Agent or any of its
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by Agent under or in connection with any of the Loan
Documents except to the extent caused by Agent's gross negligence or willful
misconduct. Agent shall be entitled to refrain from any act or the taking of any
action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
Agent shall have received instructions in respect thereof from Required Lenders
(or such other Lenders as may be required to give such instructions under
SECTION 9.6) and, upon receipt of such instructions from Required Lenders (or
such other Lenders, as the case may be), Agent shall be entitled to act or
(where so instructed) refrain from acting, or to exercise such power, discretion
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or authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Agent shall be entitled to rely, and shall be
fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Borrower and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Required Lenders (or such other Lenders
as may be required to give such instructions under SECTION 9.6).
(d) AGENT ENTITLED TO ACT AS LENDER. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "LENDER" or "LENDERS" or any
similar term shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity. Agent and its respective Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Borrower or any of its Affiliates as
if it were not performing the duties specified herein, and may accept fees and
other consideration from Borrower for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.
8.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrower and
its Subsidiaries in connection with the making of the Loans and the incurrence
of Letters of Credit Obligations hereunder and that it has made and shall
continue to make its own appraisal of the creditworthiness of Borrowers and its
Subsidiaries. Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and Agent shall not have
any responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
8.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Agent, to the extent that Agent shall not have been reimbursed by
Borrower or any of its Subsidiaries for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
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or nature whatsoever which may be imposed on, incurred by or asserted against
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents; PROVIDED that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. If any indemnity furnished to Agent for any purpose shall,
in the opinion of Agent, be insufficient or become impaired, Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
8.5 SUCCESSOR AGENT.
Agent may resign at any time by giving thirty (30) days' prior written
notice thereof to Lenders and Borrower, and Agent may be removed at any time
with or without cause by an instrument or concurrent instruments in writing
delivered to Borrower and Agent and signed by Required Lenders. Upon any such
notice of resignation or any such removal, Required Lenders shall have the
right, upon five (5) Business Days' notice to Borrower, to appoint a successor
Agent. Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, that successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed Agent
and the retiring or removed Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Agent's
resignation or removal hereunder as Agent, the provisions of this SECTION 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
8.6 SECURITY DOCUMENTS AND GUARANTEES.
(a) SECURITY DOCUMENTS. Each Lender hereby authorizes Agent to
enter into the Security Documents as secured party, on behalf of and for the
benefit of Lenders and agrees to be bound by the terms of the Security
Documents; PROVIDED that Agent shall not enter into or consent to any amendment,
modification, termination or waiver of any provision contained in Security
Documents without the prior consent of Required Lenders unless otherwise
permitted hereunder; PROVIDED FURTHER, that anything in this Agreement or the
other Loan Documents to the contrary notwithstanding:
(i) Agent is authorized on behalf of all Lenders,
without the necessity of any notice to or further consent from the Lenders, from
time to time to take any action with respect to any Collateral or the Security
Documents which may be necessary to perfect and maintain perfected the security
interest in and Liens upon the Collateral granted pursuant to the Security
Documents; and
(ii) The Lenders irrevocably authorize Agent, at its
option and in its discretion, to release any Lien granted to or held by Agent
upon any Collateral (A) upon termination of the Commitments and payment in full
of the Loans and all other Obligations payable under this Agreement and under
any other Loan Document; (B) constituting property sold or to be sold or
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disposed of as part of or in connection with any disposition permitted hereunder
or under the Security Documents; (C) constituting property in which Borrower or
any of its Subsidiaries owned no interest at the time the Lien was granted or at
any time thereafter; (D) constituting property leased to any Loan Party under a
lease which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
Borrowers or any of its Subsidiaries to be, renewed or extended; (E) consisting
of an instrument evidencing Indebtedness if the Indebtedness evidenced thereby
has been paid in full; or (F) if otherwise approved, authorized or ratified in
writing by Required Lenders, subject to SECTION 9.6. Upon request by Agent at
any time, Lenders will confirm in writing Agent's authority to release
particular types or items of Collateral pursuant to this SECTION 8.6.
(b) LENDER ACTION. Anything contained in any of the Loan
Documents to the contrary notwithstanding, each Lender agrees that no Lender
shall have any right individually to realize upon any of the Collateral under
the Security Documents, except as provided herein, or enforce any remedy or make
any demand, it being understood and agreed that all rights and remedies under
the Security Documents may be exercised solely by Agent for the benefit of
Lender Group in accordance with the terms thereof.
8.7 APPOINTMENT OF SEPARATE AGENT.
At any time or times deemed necessary or advisable by Agent or Required
Lenders, including for purposes of complying with SECTION 310(B) of the
Communications Act and for purposes of enforcing any right or remedy hereunder,
Agent or Required Lenders may appoint one or more Persons to act as a separate
agent or co-agent to the full extent permitted by law and in accordance with
such instructions and directions as Agent or Required Lenders, as the case may
be, may specify. All provisions of this Agreement which are for the benefit of
the Agent shall extend to and apply to each separate agent or co-agent appointed
pursuant to the foregoing provisions. The powers of any separate agent or
co-agent shall not exceed those of the Agent hereunder.
SECTION IX.
MISCELLANEOUS
9.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
(a) GENERAL. Subject to SECTION 9.1(B), each Lender shall have
the right at any time to (i) sell, assign or transfer to any Eligible Assignee,
or (ii) sell participations to any Person in, all or any part of its Commitments
or any Loan or Loans made by it or its Letters of Credit Obligations or any
other interest herein or in any other Obligations owed to it; PROVIDED THAT no
such sale, assignment, transfer or participation shall, without the consent of
Borrower, require Borrower to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; PROVIDED; FURTHER that no
such sale, assignment, transfer or participation of any Letter of Credit
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Obligation therein may be made separately from a sale, assignment, transfer or
participation of a corresponding interest in the Revolving Loan Commitments and
the Revolving Loans of the Lender effecting such sale, assignment, transfer or
participation.
(b) ASSIGNMENTS.
(i) AMOUNTS AND TERMS OF ASSIGNMENTS. Each
Commitment, Loan, Letter of Credit Obligation or other Obligation may (a) be
assigned in any amount to another Lender, or to an Affiliate of the assigning
Lender or another Lender, with the giving of notice to Borrower and Agent or (b)
be assigned in an aggregate amount of not less than $1,000,000 (or such lesser
amount as shall constitute the aggregate amount of the Commitments, Loans,
Letter of Credit Obligations, and other Obligations of the assigning Lender) to
any other Eligible Assignee with the giving of notice to Borrower and with the
consent of Agent (which consent shall not be unreasonably withheld or delayed).
To the extent of any such assignment in accordance with either clause (a) or (b)
above, the assigning Lender shall be relieved of its obligations with respect to
its Commitments, Loans, Letter of Credit Obligations, or other Obligations or
the portion thereof so assigned. The parties to each such assignment shall
execute and deliver to Agent, for its acceptance, an Assignment Agreement,
together with a processing fee of $3,500 and such forms, certificates or other
evidence, if any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required to
deliver to Agent pursuant to SECTION 2.8. Upon such execution, delivery and
acceptance, from and after the effective date specified in such Assignment
Agreement, (y) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights (other than any rights which survive
the termination of this Agreement under SECTION 9.9(B) and be released from its
obligations under this Agreement (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto).
The Commitments hereunder shall be modified to reflect the Commitment of such
assignee and any remaining Commitment of such assigning Lender and, if any such
assignment occurs after the issuance of the Notes hereunder, the assigning
Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to Agent for
cancellation, and thereupon new Notes shall be issued to the assignee and to the
assigning Lender, as applicable, with appropriate insertions, to reflect the new
Commitments of the assignee and the assigning Lender.
(ii) To the extent that an assignment of all or any
portion of a Lender's interests and rights under this Agreement and the other
Loan Documents to any Person pursuant to this SECTION 9.1(B) would, due to
circumstances existing at the time of such assignment, result in increased costs
under SECTION 2.8 from those being charged by such assigning Lender prior to
such assignment, then Borrower shall not be obligated to pay such increased
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costs (although Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the
assignment).
(iii) ACCEPTANCE BY AGENT. Upon its receipt of an
Assignment Agreement executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with the processing fee
referred to in SECTION 9.1(B)(I) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters that such
assignee may be required to deliver to Agent pursuant to SECTION 2.8, Agent
shall, if Agent has consented to the assignment evidenced thereby, (a) accept
such Assignment Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of Agent to such
assignment) and (b) give prompt notice thereof to Borrower. Agent shall maintain
a copy of each Assignment Agreement delivered to and accepted by it as provided
in this SECTION 9.1(B)(II).
(c) PARTICIPATIONS. The holder of any participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except action directly affecting (i) the extension of the regularly scheduled
maturity of any portion of the principal amount of or interest on any Loans
allocated to such participation or (ii) a reduction of the principal amount of
or the rate of interest payable on any Loans allocated to such participation,
and all amounts payable by Borrower hereunder (including amounts payable to such
Lender pursuant to SECTION 2.8) shall be determined as if such Lender had not
sold such participation. Borrower and each Lender hereby acknowledge and agree
that, solely for purposes of SECTION 9.4, (a) any participation will give rise
to a direct obligation of Borrower to the participant and (b) the participant
shall be considered to be a "Lender".
(d) ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
SECTION 9.1, any Lender may assign and pledge all or any portion of its Loans,
the other Obligations owed to such Lender, and its Notes to any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank; PROVIDED that (i) no Lender shall, as between Borrower and such
Lender, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
(e) INFORMATION. Each Lender may furnish any information
concerning Borrower and Borrower's Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective assignees
and participants), subject to SECTION 9.19.
(f) REPRESENTATIONS OF LENDERS. Each Lender listed on the
signature pages hereof hereby represents and warrants (i) that it is an Eligible
Assignee; and (ii) that it will make its Loans for its own account and without a
view to distribution of such Loans within the meaning of the Securities Act or
the Exchange Act or other federal securities laws (it being understood that,
subject to the provisions of this SECTION 9.1, the disposition of such Loans or
any interests therein shall at all times remain within its exclusive control).
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Each Lender that becomes a party hereto pursuant to an Assignment Agreement
shall be deemed to agree that the representations and warranties of such Lender
contained in such Assignment Agreement are incorporated herein by this
reference.
9.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly (a) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (b) all reasonable costs of
furnishing all opinions by counsel for Borrower (including any opinions
requested by Agent as to any legal matters arising hereunder) and of Borrower's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Loan Documents
including with respect to confirming compliance with environmental, insurance
and solvency requirements; (c) the reasonable fees, expenses and disbursements
of counsel to Agent (including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Borrower; (d) all the
actual costs and reasonable expenses of creating and perfecting Liens in favor
of Agent pursuant to any Security Document, including filing and recording fees,
expenses and taxes, stamp or documentary taxes, search fees, title insurance
premiums, and reasonable fees, expenses and disbursements of counsel to Agent
and of counsel providing any opinions that Agent may request in respect of the
Security Documents or the Liens created pursuant thereto; (e) a field
examination fee of $600 per auditor per diem plus all actual costs and
reasonable expenses in connection with the conduct of Agent's initial and
ongoing field examinations; (f) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any auditors,
accountants or appraisers and any environmental or other consultants, advisors
and agents employed or retained by Agent or its counsel) of obtaining and
reviewing any appraisals environmental audits or reports hereunder; (g) the
custody or preservation of any of the Collateral; and (h) after the occurrence
of an Event of Default, all costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by Agent in enforcing any Obligations of or in collecting any payments
due from any Loan Party hereunder or under the other Loan Documents by reason of
such Event of Default (including in connection with the sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty) or in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy proceedings.
9.3 INDEMNITY.
In addition to the payment of expenses pursuant to SECTION 8.2, whether
or not the transactions contemplated hereby shall be consummated, Borrower
agrees to defend (subject to Indemnitees' selection of counsel), indemnify, pay
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and hold harmless Agent, the Lender Group and the officers, directors,
employees, agents and affiliates of Agent and each member of the Lender Group
(collectively called the "INDEMNITEES"), from and against any and all
Indemnified Liabilities (as hereinafter defined); PROVIDED, that Borrower shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or xxxxx any Hazardous Materials
Activity), costs, expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct (other than
indirect or consequential damages), and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (a) this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including Agent's agreement to make
the Loan hereunder or the use or intended use of the proceeds thereof, or any
enforcement of any of the Loan Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty), (b) the statements contained in the commitment letter
delivered by Agent to Borrower with respect thereto, or (c) any Environmental
Claim or any Hazardous Materials Activity relating to or arising from, directly
or indirectly, any past or present activity, operation, land ownership, or
practice of Borrower or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this SECTION 9.3 may be unenforceable in whole or in part
because they are violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
9.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default, each Lender is hereby authorized by Borrower at any time or
from time to time, without notice to Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmeasured, but not including trust
accounts) and any other Indebtedness at any time held or owing by such Lender to
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or for the credit or the account of Borrower against and on account of the
obligations and liabilities of Borrower under this Agreement and the other Loan
Documents, including all claims of any nature or description arising out of or
connected with this Agreement or any other Loan Document, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Loan or any amounts in respect of any other
amounts due hereunder shall have become due and payable pursuant to SECTION 7
and although said obligations and liabilities, or any of them, may be contingent
or unmatured. Borrower hereby further grants to Agent a security interest in all
deposits and accounts maintained with each Lender as security for the
Obligations.
9.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit and other amounts then due and owing to that Lender hereunder or under
the other Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such
Lender) which is greater than the proportion received by any other Lender in
respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (a) notify Agent and each
other Lender of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; PROVIDED that if
all or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Borrower or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Borrower expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Borrower to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
9.6 AMENDMENTS AND WAIVERS.
(a) THE REVOLVING LOAN (INCLUDING LETTERS OF CREDIT) AND THE
TERM LOAN A. No amendment, modification, termination or waiver of any provision
of this Agreement or of the Revolving Note or Term A Note, or consent to any
departure by Borrower therefrom, shall in any event be effective without the
written concurrence of Required Lenders; PROVIDED that any such amendment,
modification, termination, waiver or consent which increases the amount of any
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of the Revolving Loan or Term Loan A Commitment or reduces the principal amount
of the Revolving Loan or Term Loan A; postpones the dates of regularly scheduled
or mandatory payments or prepayments of such Loans or reductions of such
Commitments by Borrower in respect thereof (other than with respect to
prepayments required under SECTION 2.4 for which the written concurrence of
Required Lenders only shall be required for any such amendment, modification,
termination, waiver or consent); changes any Revolving Lender's or Term A
Lender's Pro Rata Share; changes in any manner the definition of "Required
Lenders"; changes in any manner any provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of all Revolving Lenders
or Term A Lenders; postpones the date on which any interest or any fees are
payable; decreases the interest rate borne by any of such Loans (other than any
waiver of any increase in the interest rate applicable to any of such Loans
pursuant to SECTION 2.2(E)) or the amount of any fees payable hereunder;
increases the maximum duration of Interest Periods permitted hereunder; reduces
the amount or postpones the due date of any amount payable in respect of, or
extends the required expiration date of, any Letter of Credit; changes in any
manner the obligations of the L/C Issuer relating to the Letter of Credit
Obligations; or changes in any manner the provisions contained in SECTION 7.1 or
this SECTION 9.6; or releases all or substantially all of the Collateral shall
be effective only if evidenced by a writing signed by or on behalf of all
Revolving Lenders and Term A Lenders. In addition, (i) any amendment,
modification, termination or waiver of any of the provisions contained in
SECTION 3 shall be effective only if evidenced by a writing signed by or on
behalf of Agent and Required Lenders, (ii) no amendment, modification,
termination or waiver of any provision of any Revolving Note or Term A Note
shall be effective without the written concurrence of the Lender which is the
holder of such Note, and (iii) no amendment, modification, termination or waiver
of any provision of SECTION 8 or of any other provision of this Agreement which,
by its terms, expressly requires the approval or concurrence of Agent shall be
effective without the written concurrence of Agent. Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Borrower in any case
shall entitle Borrower to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this SECTION 9.6 shall be binding upon each such
Lender at the time outstanding, each future Revolving Lender and Term A Lender
and, if signed by Borrower, on Borrower.
(b) THE TERM LOAN B. No amendment, modification, termination
or waiver of any provision of this Agreement or of any provisions of this
Agreement related to Term Loan B, or consent to any departure by Borrower
therefrom, shall in any event be effective without the written concurrence of
Agent, which concurrence will not be unreasonably withheld and seventy-five
percent (75%) of the Term B Lenders (the "TERM B REQUIRED LENDERS"); PROVIDED,
HOWEVER, that the following shall not be effective without the written
concurrence of Agent and all Term B Lenders: any amendment, modification,
termination, waiver or consent which: increases the amount of any of the Term
Loan B Commitment or reduces the principal amount of any of the Term B Loans;
postpones the dates of scheduled payments of the Term B Loans or reductions of
the Term Loan B Commitment by Borrower in respect thereof; changes any Term B
Lender's Pro Rata Share; changes in any manner the definition of "Term B
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Required Lenders"; changes in any manner any provision of this Agreement which,
by its terms, expressly requires the approval or concurrence of all Term B
Lenders; postpones the date on which any interest or any fees are payable;
decreases the interest rate borne by any of the Term B Loans or the amount of
any fees payable hereunder. In addition, no amendment, modification, termination
or waiver of any provision of any Term B Note shall be effective without the
written concurrence of the Term B Lender that is the holder of such Note. Agent
may, but shall have no obligation to, with the concurrence of any Term B Lender,
execute amendments, modifications, waivers or consents on behalf of such Term B
Lender. Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on
Borrower in any case shall entitle Borrower to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this SECTION 9.6
shall be binding upon each Term B Lender at the time outstanding, each future
Term B Lender and, if signed by Borrower, on Borrower.
9.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Default if such action is taken or condition exists.
9.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when received. For the
purposes hereof, the address of each party hereto shall be as set forth under
such party's name on the signature pages hereof or such other address as shall
be designated by such Person in a written notice delivered to the other parties
hereto. With respect to the Term B Lenders, such notice address is set forth on
SCHEDULE 2.1 hereto.
9.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
(b) Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Borrower set forth in SECTIONS 2.7(D),
2.8, 9.2, 9.3 and 9.4 shall survive the payment of the Loans and the termination
of this Agreement.
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9.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Agent or any Lender in the exercise
of any power, right or privilege hereunder or under any other Loan Document
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other power, right or privilege. All rights and remedies existing under
this Agreement and the other Loan Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
9.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Agent nor any Lender shall be under any obligation to marshal
any assets in favor of Borrower or any other party or against or in payment of
any or all of the Obligations. To the extent that Borrower make a payment or
payments to Agent or Lenders or Agent or any Lender enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
9.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the Note
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
9.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
9.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
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9.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
9.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of lender. Neither Borrower' rights or
obligations hereunder nor any interest therein may be assigned or delegated by
Borrower without the prior written consent of all Lenders.
9.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO BORROWER AT ITS ADDRESS PROVIDED
IN ACCORDANCE WITH SECTION 9.8;
(D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (3) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(E) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND
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(F) AGREES THAT THE PROVISIONS OF THIS SECTION 9.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS
LAW SECTION 5-1402 OR OTHERWISE.
9.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 9.18 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
9.19 CONFIDENTIALITY.
Agent and each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement which has been identified as
confidential by Borrower in accordance with Agent's or such Lender's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by Borrower that in any event Agent or such Lender may make disclosures to
Affiliates of Agent or such Lender or disclosures reasonably required by any
bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by Agent or such Lender of the Loans or any
participations therein or disclosures required or requested by any governmental
agency or representative thereof or pursuant to legal process; provided, that,
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unless specifically prohibited by applicable law or court order, Agent or such
Lender shall notify Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of Agent or such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information; and provided, further, that in no event shall
Agent or such Lender be obligated or required to return any materials furnished
by Borrower or any of Borrower's Subsidiaries.
9.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents, or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered (including
delivery by facsimile transmission) shall be deemed an original, but all such
counterparts, together shall constitute but one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of Borrower and Agent.
9.21 RESTATEMENT OF FIRST AMENDED CREDIT AGREEMENT.
The parties hereto agree, that on the Closing Date, the following
transactions shall be deemed to occur automatically, without further action by
any party hereto:
(a) The First Amended Credit Agreement shall be deemed to be
amended and restated in its entirety in the form of this Agreement; and
(b) all Obligations (as defined in the First Amended Credit
Agreement), to the extent not paid on the Closing Date, shall be deemed to be
Obligations outstanding hereunder; and
(c) the guarantees and Liens in favor of GECC on the Closing
Date securing payment of the Obligations (as defined in the First Amended Credit
Agreement), the Guaranteed Obligations (as defined in the Subsidiary Guaranty),
and the Secured Obligations (as defined in the Borrower Pledge Agreement, the
Holdings Pledge Agreement or the CRI Pledge Agreement, as applicable) shall be
deemed to have been assigned as guarantees and Liens in favor of the Agent for
the benefit of the Lender Group and shall remain in full force and effect to
secure the Obligations under this Agreement without further amendment; and
(d) all references in the Loan Documents to the First Amended
Credit Agreement shall be deemed to refer to this Agreement without further
amendment.
The parties hereto acknowledge and agree that this Agreement and the
other Loan Documents do not constitute a novation, payment and reborrowing or
termination of the Obligations pursuant to the First Amended Credit Agreement
and that all such Obligations (as defined therein) are in all respects continued
and outstanding as Obligations under this Agreement and the Notes with only the
terms being modified from and after the effective date of this Agreement as
provided in this Agreement, the Notes and other Loan Documents.
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9.22 INTENT TO LIMIT INTEREST CHARGES TO MAXIMUM LAWFUL RATE. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrower and the Lender Group, in executing and
delivering this Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated herein; PROVIDED, HOWEVER, that, anything
contained herein to the contrary notwithstanding, if said rate or rates of
interest or manner of payment exceeds the maximum allowable under applicable
law, then, IPSO FACTO, as of the date of this Agreement, Borrower is and shall
be liable only for the payment of such maximum as allowed by law, and payment
received from Borrower in excess of such legal maximum, whenever received, shall
be applied to reduce the principal balance of the Obligations to the extent of
such excess.
9.23 CONFLICTS.
Except as otherwise provided in this Agreement or any of the other Loan
Documents by specific reference to the applicable provisions of this Agreement,
if any provision contained in this Agreement conflicts with any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER: VIASOURCE COMMUNICATIONS, INC., a
New Jersey corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
Notice Address:
000 Xxxx Xxxxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
with a copy to:
Akerman Senterfitt & Xxxxxx, P.A.
SunTrust International Center
Xxx Xxxxxxxxx Xxxxx Xxxxxx,
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
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SUBSIDIARY GUARANTORS: VIASOURCE HOLDINGS, INC., a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
QUEENS CABLE CONTRACTORS, INC., a New Jersey
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
RTK CORPORATION, a New Jersey corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
COMMUNICATION RESOURCES INCORPORATED, a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
CRI CHERRY HILL, INC., a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
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TELECRAFTER ACQUISITION CORP. a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
PC NETWORK SOLUTIONS, INC. (f/k/a Viasource
Northeast, Inc.), a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
EXCALIBUR CABLE COMMUNICATIONS, LTD. (f/k/a EX
Acquisition, Inc.), a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
TELECORE, INC. (f/k/a TC Acquisition, Inc.), a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
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WIRELESS & CABLE COMMUNICATIONS GROUP, INC., a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
DSC ACQUISITION, INC., a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
SCC ACQUISITION, INC., a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: President
Notice Address for each Subsidiary Guarantor:
000 Xxxx Xxxxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
with a copy to:
Akerman Senterfitt & Xxxxxx, P.A.
SunTrust International Center
Xxx Xxxxxxxxx Xxxxx Xxxxxx,
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
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AGENT: GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By: /s/ Xxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxx Xxxx
-------------------------------------
Title:
-------------------------------------
Notice Address:
General Electric Capital Corporation
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Viasource Account Manager
with a copy to:
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx X. Poland, Esq.
and a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, III, Esq.
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REVOLVING LENDER /
TERM A LENDER: GENERAL ELECTRIC CAPITAL
CORPORATION, in its capacity as Lender
By: /s/ Xxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxx Xxxx
-------------------------------------
Title:
-------------------------------------
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TERM B LENDERS: CREST COMMUNICATIONS PARTNERS II LP
BY: CREST PARTNERS II LLC, ITS
GENERAL PARTNER
BY: WAT CAPITAL LLC, ITS
MANAGING MEMBER
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Member
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XXXXXXX NATIONAL LIFE INSURANCE
COMPANY
BY: PPM AMERICA, INC., AS ATTORNEY IN
FACT, ON BEHALF OF XXXXXXX NATIONAL
LIFE INSURANCE COMPANY
By: signature illegible
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
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OLD HICKORY FUND I, LLC
BY: PPM AMERICA, INC., ITS MANAGER
By: signature illegible
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
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XXXXX CAPITAL PARTNERS, LLC
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------
Title:
-------------------------------------
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XXXXX X. NASSAU
/s/ XXXXX X. NASSAU
-------------------------------------
XXXXX NASSAU
/s/ XXXXX NASSAU
-------------------------------------
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PNC CAPITAL CORP.
By: /s/ Xxxxx McL. Xxxxxxx
----------------------------------------
Name: Xxxxx McL. Xxxxxxx
Title: Executive Vice President
WOOD STREET PARTNERS, II
By: /s/ Xxxxx McL. Xxxxxxx
----------------------------------------
Name: Xxxxx McL. Xxxxxxx
Title: General Partner
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